Argentina warns it will take action over illegal offshore oil drilling project in Malvinas Islands

Argentina expressed its “utmost rejection” after Israeli oil company Navitas Petroleum and British firm Rockhopper announced they would invest US$2.1 billion in the first oil drilling project off the coast of the Malvinas Islands, the South Atlantic archipelago under British rule which the South American country claims as its own. The project, based at the Sea Lion oil field, located about 200 kilometers north of Puerto Argentino, will start drilling for oil in 2028. The Argentine foreign ministry said the project is “illegitimate” as it was not approved by Argentina and therefore was a “unilateral decision” made by the government of the United Kingdom. A 1976 United Nations resolution established that neither country can carry out unilateral decisions over the territory as long as the negotiations over the sovereignty claim over the Malvinas continue. On Wednesday, the government of the Malvinas Islands announced that Israeli company Navitas Petroleum Development and Production Ltd and British firm Rockhopper Exploration Plc made a final decision to invest in the development programme for the northern area of the Sea Lion oil field. In an official statement, the islands’ government said that in October their executive council had considered and approved a series of reports related to offshore minerals, but did not provide details on the amount of the investment or what the companies will do. In mid-2024, they had launched a public consultation asking islanders to weigh in on the environmental impact of an offshore oil exploration and drilling project, which was approved. The Argentine government stressed that all unilateral exploration and development of renewable and non-renewable natural resources in the areas subject to the sovereignty dispute go against a 1965 UN resolution that encourages Argentina and the U.K. to find a peaceful solution to the issue. The statement said that the project will drill the Argentine continental platform in an “illegal exploration and development of hydrocarbons” in the area, over which the country has had a sovereignty claim for over a century. The Argentine foreign ministry also recalled that Rockhopper’s operations were declared clandestine and illegal by Argentina in 2012 and banned to operate in the country for 20 years in 2013.  Navitas was equally sanctioned in 2022 for carrying out oil drilling operations in Argentine territory without authorization from that country. Navitas has blocked access to their website from Argentina, making it impossible to consult any information on their projects. The foreign ministry warned that the actions carried out by those companies could be potentially irreversible. “Argentina will deepen its action plan in order to adopt all additional measures, in accordance with international law, that it considers necessary to safeguard its sovereign rights and interests,” the ministry said. First oil drilling in Malvinas According to a statement published in Rockhopper’s website, the first phase of the project will require an investment of US$2.1 billion and will produce 170 million barrels of oil, as from 2028. The aim is to produce up to 50,000 barrels per day. A second phase of the project, that would produce an additional 149 million barrels, was also approved by the local authorities. “All approvals and consents necessary at this stage have now been received for the project,” the Rockhopper statement said. According to U.K. news outlet The Times, the Malvinas Islands government will take a 9% royalty on revenues from the field, and 26% corporation tax on profits. Navitas owns 65% of the project, leaving Rockhopper with the remaining 35%. Editorial disclaimer: Although the UK refers to the Malvinas territory as the “Falklands Islands,” Argentina strongly contests this name. The Buenos Aires Herald refers to the islands as the Malvinas Islands.