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Argentina detains vessel carrying oil pipes 'to Falklands'

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Feb. 12 -- Argentina has detained a cargo vessel it claims recently delivered oil drilling supplies to the Falkland Islands, stepping up pressure on the UK to halt planned oil exploration activities in the region.

“All operations in Argentine ports by the ship Thor Leader, registered in the Isle of Man, are banned until such time as it complies with the rules in force,” said a ruling by the office of Argentina's undersecretary for ports and waterways.

The ruling came after the Argentine government announced that it prevented the loading of seamless steel tubes, used in the oil industry, onto the Thor Leader, which had arrived at the Argentinean Port of Campana from the Falkland Islands.

“There's evidence that the vessel was used to ship supplies related to oil industry activities being illegitimately promoted by the United Kingdom in the Falklands,” Argentina's Foreign ministry said, adding that the ship’s earlier visit to the British-held islands took place without Argentine permission.

Techint, which had contracted the ship, denied any suggestion that the Thor Leader was bound for the Falklands. “The ship was contracted to take the steel tubes to five different customers in the Mediterranean, none of which operates in the Falklands,” Techint said.

Argentina’s action came after the UK announced plans to begin oil exploration and production in the northern basin of the Falklands, or Malvinas as the islands are known in the Spanish-speaking world.

"The Argentine government had protested on Feb. 2 the renewal of British authorizations for oil explorations in areas of the Argentine continental platform illegally occupied by the United Kingdom," the Argentine foreign ministry said.

Currently, three British listed firms—Desire Petroleum PLC, Rockhopper Exploration PLC, and BHP Billiton—have launched drilling programs in the North Falklands basin, with the first drilling rig expected to be in position later this month (OGJ Online, Feb. 8, 2010).

Exploratory drilling around the islands in 1998 turned up promising indications of hydrocarbons, with analysts now saying that as many as 60 billion bbl of high-grade oil could be found in the 200-square-mile economic zone surrounding the islands.

However, Phyllis Rendell, director of mineral resources for the Falkland Islands’ government, played down the current exploration efforts, saying that, “It’s very likely there won’t be a commercial find in this drilling phase.”

Argentina claims the Falklands and surrounding waters are under illegal UK occupation. But the UK, which won a war with Argentina in 1982 over the islands, stands by its right to grant the drilling concessions.

“The UK has no doubt about the sovereignty of the Falkland Islands and the surrounding maritime areas. It's clear that the hydrocarbons exploration is a legitimate business,” said a Foreign Office spokesperson.

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