UPDATE 1-UK says Falkland drilling within international law

Tue Feb 23, 2010 4:18pm EST

(Adds Brazilian president comments, paragraphs 8-9)

LONDON Feb 23 (Reuters) - Britain rejected Argentine objections to oil exploration off the disputed Falkland Islands on Tuesday, saying the drilling was within international law.

Argentine President Cristina Fernandez said Latin American leaders backed her objections to exploration off the Falklands, known in Spanish as Las Malvinas, as drilling began on the first well on Monday [ID:nN22223803].

Argentina, which has claimed the South Atlantic islands since Britain established its rule in the 19th century, invaded them in 1982. After a two-month war, it was forced to withdraw, but still claims the archipelago and says oil exploration by Britain's Desire Petroleum DES.L is a breach of sovereignty.

"British sovereignty in respect of the Falklands is absolutely clear in international law ... There is no question about it," British Foreign Secretary David Miliband said after giving a speech at the Demos think tank in London.

"The exploration that is going on off the Falklands ... is fully within international law, fully based on precedent," he said.

Falkland islanders have the right to a decent life and to build their own economic future, he said.

Argentina formally objected to the plan to drill for oil near the islands and said it would require all ships from the Falklands to obtain permits to dock in Argentina.

The "Rio Group" of Latin American leaders, meeting this week in Mexico, issued a statement on Tuesday supporting Argentina's demands to halt drilling around the Falklands.

Brazilian President Luiz Inacio Lula da Silva said the matter should be revisited by the United Nations.

"We have to start the fight for the Secretary General of the United Nations to re-open this debate," Lula told the Rio Group summit in Mexico. He suggested the issue may have stagnated because of Britain having a permanent seat on the U.N. Security Council.

A spokesman for British Prime Minister Gordon Brown said he did not expect any direct contact between Brown and Fernandez on the issue and said Britain had given no thought to any military response. "There's nothing to respond to," he said.

The Falklands are not an onshore oil producer and have no proven onshore reserves, but oil companies are betting that offshore fields hold billions of recoverable barrels of oil.

Desire Petroleum said it broke ground at a well on its offshore "Liz" prospect, which could contain up to 400 million barrels, though the exploration may recover nothing. (Reporting by Adrian Croft and Keith Weir in London; Additional reporting by Mica Rosenberg in Playa del Carmen)

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