Falklands : It's Time for 'the Guardian' to Learn a Few Facts About Falklands' Oil
Submitted by Falkland Islands News Network (Juanita Brock) 04.04.2010 (Article Archived on 18.04.2010)
Constitutionally the mineral resources in the North Falkland Basin belong to the Government of the Falkland Islands
IT’S TIME FOR THE GUARDIAN TO LEARN A FEW FACTS ABOUT FALKLANDS' OIL
An Editorial and Personal view by J. Brock (FINN)
An article in The Guardian on Sunday 4 April 2010 by Daniel Montamat and Daniel Kerner has reported that “both the UK and Argentina could benefit from diplomatic negotiations over the exploitation of natural Falklands resources.” It goes on to say that “tensions between Argentina and Great Britain spiked in February after British company Desire Petroleum began drilling for oil and natural gas in the northern basin of the Falkland Islands.
Seeing this article hit it wrong in the first two sentences I felt it time to correct some basic facts.
Constitutionally the mineral resources in the North Falkland Basin belong to the Government of the Falkland Islands. The Government of Argentina needs to speak with us as well as HMG about issues concerning mineral resources in that area. Secondly, Desire Petroleum are exploring for oil and not at present exploiting it.
Yes, as soon as news broke out the Argentine government announced “it would require a special permit for ships using Argentine ports or travelling through its waters destined to the islands, and obtained strong diplomatic support from most Latin American countries.”
Instead of defending a British Overseas Territory and exposing Argentine edicts as the bullying tactics they are, the UK press in general tried to start a mini war using flotillas of ships already but historically present since 1982. They also advocated giving the Falklands to Argentina, using scenarios that would strip the people of most rights we have today. One of those rights is to explore for mineral resources beneath our own waters.
Adding that “neither the British nor the Argentine governments will come to terms over sovereignty of the islands any time soon,” no mention of including the Falkland Islands Government in any negotiations, even though FIG – ultimately the people of the Falkland Islands, own the resources, was made.
Going on to say that “developing the region's oil and natural gas potential is clearly in their best interests, and this will be facilitated by a negotiation between both governments,” the article is unclear about who “their” really is. Truly, Argentina will benefit at the Falkland Islands’ expense if the Guardian gets its way.
Granted, co-operation with Argentina would be ideal but that country needs to recognise that the Government of the Falkland Islands exists and has the right to be a negotiating partner on anything that deals with its sovereignty as well as its constitutional right to explore for and exploit its own mineral resources.
We find it amazing that Argentina, with vast oil reserves of its own has not thought to do seismic and exploratory drilling in their waters near the Falkland Islands – who knows, maybe they might strike it lucky. Perhaps they should find out about the full potential of their own reserves before trying to expropriate ours.
On this point both the Guardian and I agree. The Guardian’s wording is: “In addition, Argentina should abandon its current approach towards oil exploration that has stalled investment, and encourage exploration in its own offshore area.” The article goes on to say “that would not only help improve the country's increasingly bleak energy outlook, but could help develop a critical mass of services and infrastructure that could in turn help exploration in the Falkland basin. A somehow more promising project led by Repsol-YPF is expected to begin exploration in Argentine waters adjacent to the islands in 2011.”
I disagree with the statement that “Moreover, if the project in Argentine waters is successful, it would further strengthen Argentina's intransigence.” Argentina has been intransigent since it began teaching that “the Falkland Islands are Argentine” in their schools – some 65 years ago.
Pointing out that “British reserves are on the decline, while oil production would be a major boost for the Falklands inhabitants' income and political leverage,” the article says that the “challenging outlook for exploration, both would benefit substantially from Argentine co-operation. In fact, Desire's project's viability assumes that oil needs to be transported to Argentine terminals.” Falkland Islanders know this and are baffled as to why Argentina, a country with financial jitters, wouldn’t want to take advantage of business opportunities afforded by allowing our crude to be landed and processed in their facilities.
When the article indicates that “Argentina could also benefit from negotiations because its own oil production outlook is bleak, to a great extent due to policies that have discouraged investment,” alarm bells and red flags begin warning us that if the Falklands are handed back to Argentina those problems would be rampant here. No thank you. We can do better. And so can Argentina if they get their act together over their own resources.
Saying that an “oil discovery in the Falklands would weaken its political leverage” is also confusing. As a nation we have internal self-government and are responsible for everything except defence and foreign affairs. We have a constitution that gives us the right to govern ourselves.
Agreed – “it would be politically impossible for any Argentine government to abandon its claim of sovereignty over the islands.” But that’s their problem – one which they must solve themselves. From our point of view they could always drop their sovereignty claim and act like a first world country instead of putting “as many hurdles as possible, not allowing the use of Argentine ports or infrastructure for example, to raise the cost of oil exploration and thus affect its logistical and commercial viability.”
The article’s main point is that “Argentina should begin negotiations with the British government over exploitation of natural resources without compromising its claim over sovereignty, which could remain under a ‘diplomatic umbrella,’ as it did during most of the 1990s.” Truth is that Argentina needs to negotiate with the Government of the Falkland Islands over exploitation of resources. I would further say that at this stage we are only exploring for hydrocarbons and are not impressed with the fuss Argentina and some elements of the British press are causing.
Assuming that “Britain, in the meantime should refrain from making unilateral decisions over oil and other commercial activities in the region until an agreement is reached and convince the islanders that negotiations are in their best interest” is naïve in that the statement is aimed at Britain and not the Falkland Islands where the responsibility for such activities lays.
“Desire's disappointing results,” says the article, “should help them realise the importance of Argentine co-operation.” My view is that Desire didn’t drill deep enough and that we still have five or six exploration wells to drill before the final tally is realised. After all, there were 78 wells drilled in the North Sea before any commercially viable reserves were found.
I am confused by the statement: “Any agreement will likely need to be based on finding an appropriate way of distributing the governments' rents.” Whose government are they talking about? It is the Falkland Islands Government that negotiates rents, etc.
In the Guardian’s view, “this could be a solution acceptable to all parties involved that would facilitate co-operation and thus increase the potential success of oil exploration.” FINN feels that any negotiations over oil should include the Falkland Islands Government as a primary negotiator and not as an add-on.
Argentina has put an economic squeeze on the Falkland Islands and any ‘deal’ would not “lower the costs and political risks of oil exploration” unless sovereignty is negotiated. The Argentine Government has said officially that it will not give up its diplomatic and economic harassment while the Falklands are a British Overseas Territory.
The quality of any commercially viable reserves of hydrocarbons will do the talking when it comes time for “larger players better larger financial and technical resources to explore in the area.” Countries with worse political scenarios have vibrant hydrocarbons industries.
I believe that common ground is all around us and there is no difficulty in exploiting it – providing all three parties involved can resolve differences. Until the Falklands can be seen as an equal partner with constitutional rights to exploit mineral resources, that common ground will be buried in a mess not of our making.
In 1999 the United Kingdom, Argentina and the Falkland Islands came up with an agreement that created a special area of co-operation in the South-west of our zone in an area where straddling reserves were thought to be. In 2007 the Argentines pulled out of that agreement. What’s to say they wouldn’t pull out of any further agreement they make with us?