Wednesday, April 4, 2012

Feud Over the Falklands: Black Gold

As part of the thirtieth anniversary of the beginning of the Falklands War between Argentina and Britain we will examine several topics this week regarding the conflict and its aftermath.

The military hostilities that took place three decades ago have been replaced with growing diplomatic tensions. At a Falklands War memorial ceremony on Monday Argentine president Cristina Fernandez de Kirchner declared that it is “an injustice that in the 21st century colonial enclaves like the one we've got a few kilometers away continue to exist.” Perhaps coincidentally, the British naval destroyer HMS Dauntless is being sent to the Southern Cone on a “pre-planned and routine” deployment.

As this very brief clip from euronews shows, one of the issues affecting the tug-of-war over the Falklands is the possibility of billions of barrels of oil in offshore fields:

Several British firms have been involved in offshore oil and gas exploration projects near the Falklands. Falkland Oil and Gas, (FOG) is said to be seeking inventors to help pay for the exploration of several sites with “significant potential.”

According to Reuters, the prospect of a boom in petrodollars has some Falklands residents hopeful of a better economic future despite the current political worries:
Tax revenue is already getting a boost from oil exploration as local businesses provide logistical support to the offshore rig, helping shield the economy from the global slowdown.

Unemployment is zero in the Falklands and house prices have been rising, partly due to expectations of an oil boom.

Overgrown plots between the traditional tinned-roof cottages of Stanley are being cleared to make way for modern family homes and old Land Rovers are fast being replaced by shiny new models.
The Argentine government, meanwhile, are not keeping their arms crossed have taken action. Last month the Foreign Ministry sent letters to the heads of the New York and London stock markets warning that the British oil exploration in Falklands waters was “illegal.” Furthermore, Foreign Minister Hector Timerman claimed that firms such as FOG risk receiving “civil and criminal penalties” from Argentina.

Despite the political tensions regarding the Falklands, offshore oil exploration in Latin America will surely continue to be an inviting investment for foreign firms. What remains to be seen is how much “black gold” is under the sea surface and who will benefit most from its drilling.

Video Source - YouTube via euronews

Online Sources- ABC News, UPI, Reuters, BusinessWeek, BBC News

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