Britain accuses Argentina of "harassing" Falklands

Fri Mar 16, 2012 12:56pm EDT

* Argentina vows legal action vs Falklands oil explorers

* UK will work with companies to lessen impact of measures

* Tensions rising before 30th anniversary of war

By Adrian Croft

LONDON, March 16 (Reuters) - Britain accused Argentina of illegal attempts to intimidate Falkland islanders on Friday after Buenos Aires said it would take legal action against any companies involved in oil exploration off the disputed South Atlantic territory.

Tensions between Britain and Argentina are rising as the 30th anniversary approaches of Argentina's invasion of the Falklands that was repulsed by a British task force after a 10-week conflict that killed 650 Argentine and 255 British troops.

The discovery of oil off the islands, which analysts estimate could bring in up to $167 billion in taxes and royalties in the best case scenario, has raised the stakes.

Argentina said on Thursday it would take legal action against any company involved in oil exploration off the islands it calls the Malvinas, in a drive to pressure Britain into sovereignty talks.

A spokeswoman for Prime Minister David Cameron called the Argentine move "regrettable" and the foreign ministry said the Falklands were entitled to develop oil resources without interference.

"From harassing Falklands shipping to threatening the islanders' air links with Chile, Argentina's efforts to intimidate the Falklands are illegal, unbecoming and wholly counter-productive," a Foreign Office spokeswoman said.

The Foreign Office would work with any company affected to limit the impact of Argentine legal steps, she said.

London has refused to start talks on sovereignty over the Falklands unless the 3,000 islanders call for them, which they show no signs of doing.

BLOCKADE

British explorer Rockhopper, which discovered the Sea Lion field north of the islands in 2010, has been seeking a partner to invest in the $2 billion project.

Borders & Southern and Falkland Oil & Gas are set to drill wells south of the islands this year.

An industry source in London said on Thursday legal action against companies involved in Falklands oil exploration "will have no impact on Rockhopper's operations."

Argentina says exploration and drilling are illegal since the area is contested. It did not make clear what kind of judicial action it had in mind.

Britain says recent Argentine moves are an attempt to impose an economic blockade on the remote islands.

In December, South American trading bloc Mercosur agreed that ships sailing under a Falklands' flag would be banned from docking at any of its ports in solidarity with Argentina.

This month, Argentina said it wanted to renegotiate a 1999 accord with Britain that allows a weekly flight by Chilean airline Lan to the islands, proposing instead that state-run Aerolineas Argentinas fly there.

British government officials see this as an attempt to cut the islanders' existing air link to Chile.

Argentina complained to the United Nations in February over what it called Britain's "militarisation" of the South Atlantic after London announced plans to dispatch a Navy destroyer to the area and it criticised the posting of Prince William - second-in-line to the British throne - to the islands as a military search-and-rescue pilot.

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