| LONDON, March 16
LONDON, March 16 Some of the largest banks
and accounting firms in the world could be at risk of asset
seizures if Argentina makes good on its threat to penalise
companies which work with oil drillers exploring offshore the
On Thursday, Argentine Foreign Minister Hector Timerman said
Argentina planned to take administrative and legal action
against companies providing logistical, financial and legal
support to the search for Falklands oil.
This could mean trouble for banks like Barclays,
HSBC, Standard Chartered and Bank of America
unit Merrill Lynch, which provide services to Falkland
explorers such as Rockhopper and Borders & Southern and which
also have operations in Argentina.
"They (Argentina) certainly could try and bring claims
against the companies in the Argentinean courts and they could
also try and seize any assets that were actually in Argentina,"
said Catherine Robert, a specialist in international arbitration
and cross-border litigation at law firm Hogan Lovells.
Verbal sparring over the sovereignty of the islands, which
Argentina calls Las Malvinas, has heated up in recent months
ahead of the 30th anniversary of Britain's expulsion of an
Argentine invasion force.
Britain has vowed to defend the archipelago, saying it will
negotiate sovereignty or oil rights only in the unlikely event
that the 3,000 islanders want that.
Other bodies which provide services to Falkland explorers
and which have Argentina operations include international
accounting groups KPMG, BDO and UHY Hacker Young.
All these groups "need to pay closest attention to what's
being said in Argentina and perhaps start talking to Argentinean
lawyers," Robert added.
Rockhopper has discovered 350 million barrels of recoverable
oil at its Sea Lion discovery and plans to start pumping oil by
2016 - moves that have sparked the ire of Buenos Aires.
Mark Jones, a Latin American specialist and chair of the
department of political science at Rice University in the United
States, said Argentina wanted to attack the explorers, which
also include Argos Resources, Desire Petroleum and Falklands Oil
and gas (FOGL), where they were vulnerable.
"They're signalling that they're going to do whatever it
takes to put obstacles in the path towards developing the energy
resources in the Falkland Islands," he said.
The banks and audit groups declined to say what they would
do if it came to a choice between operating in Argentina or
serving the explorers. Rockhopper, Desire, Borders & Southern,
Argos and FOGL also declined comment.
A spokesman for the UK Foreign Office said the government
would support companies that may be affected.
"We are studying Argentina's remarks carefully and will work
closely with any company potentially affected to ensure that the
practical implications for them are as few as possible," he
Oil services providers could also be at risk from Argentine
actions, although the country is not a big market for supply
vessels, offshore drilling rigs or other equipment being used at
This is partly because government moves to exert more
control over the country's resource sector have deterred
investment by foreign companies with offshore expertise.
Brazil has supported Argentina's claims to the islands. If
it followed Argentina's lead and barred companies servicing the
Falklands from operating in Brazil, this would be a bigger
problem for the industry.
Brazil is emerging as one of the biggest offshore oil
production centres in the world. In response to Argentine
requests, it has said it would bar ships supplying the Falklands
oil industry from its ports.
Diamond Offshore and Ocean Drilling have provided drilling
vessels to the Falklands drilling effort and also have
operations in Brazil.