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Argentina scraps Falklands oil-sharing deal with UK

"Unfortunately, the persistent intransigence of the United Kingdom has not allowed for frank discussion."

Jorge Taiana, Argentine foreign minister

Argentina scrapped a deal with Britain on Tuesday to share oil found off the Falkland Islands days before the 25th anniversary of its invasion of the British territory that it claims as its own.

Foreign Minister Jorge Taiana said Argentina decided to end the cooperation arrangement because Britain "unilaterally" opted to put out for public bid oil deals in the area in the South Atlantic.

"Argentina does not oppose cooperating with the United Kingdom, so long as this contributes to reopening talks about the islands' sovereignty," Taiana said after meeting with Argentine President Nestor Kirchner.

"Argentina has asked the United Kingdom for open dialogue" on the Falklands, Taiana said.

"Unfortunately, the persistent intransigence of the United Kingdom has not allowed for frank discussion," he said.

Buenos Aires continues to claim sovereignty over the islands, which the country invaded on April 2, 1982.

More than 900 people died, including 655 Argentines, 255 British troops and three islanders, before Argentine forces surrendered on June 14, 1982.

Argentina, governed by a military junta during the war, returned to democracy in 1983.

"The only way to solve this anachronistic colonial dispute is in a pacific, just and lasting manner," Taina said.

Taiana said he had informed Britain's ambassador to Buenos Aires, John Hughes, about the decision to end the oil deal.

Seismic studies around the archipelago indicate as much as 60 billion barrels of crude lie in the ocean bed.

On Sept. 27, 1995, a joint declaration on southwest Atlantic Offshore Cooperation Activities had sealed the deal to share oil exploration and production.

Argentine former president Carlos Menem had said that the declaration would "allow Argentina to join the exploration and exploitation of crude in the area," Taiana said.

"But in practical terms, it never happened," the foreign minister said.

Test wells drilled in 1998 by Shell and Amerada Hess hit oil, though not of sufficient quality or volume to be marketable.

The price of US$10 for a barrel of oil in 1998 was not attractive, but rising prices could spark greater interest in the seas off the islands.

Some fear that Buenos Aires would take even keener interest in the islands if oil were struck there.

Argentina has repeatedly reaffirmed its "permanent and inalienable objective" of reclaiming the islands, which have been British-ruled for 174 years.

Argentina finds it "incomprehensible" that Britain refuses to discuss the claim although the UN and Organization of American States urged the countries to "renew bilateral negotiations."

The two nations re-established diplomatic relations in 1990.

Argentina says British forces occupied the islands on Jan. 3, 1833, and "removed by force its residents and Argentine authorities who were established there legitimately.
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