Oil dominates 25th Falklands War anniversary

Argentina has used the upcoming 25th anniversary of the Falklands War to formally quash a deal with Britain to share oil found near the disputes islands. Argentinean foreign minister Jorge Taiana said the decision was taken because of Britain's unilateral action to put oil deals out for public tender without discussion with Argentina.

The Chief Executive of the Falkland Islands Government, Chris Simpkins, brushed off the Argentinean statement. He said while Taiana's announcement was “unfortunate” it would have no practical effect and it would be “business as usual” in the Falkland Islands. The Falklands Oil and Gas Ltd will continue to explore for oil off the Eastern shores of the islands.

The British Geological Survey says 60 billion barrels of oil lie under the ocean around the Falkland Islands. Britain and Argentina signed a joint declaration called the South-west Atlantic Offshore Cooperation Activities in 1995. Then-President Carlos Menem hoped the deal would allow Argentina join the exploration and exploitation of crude in the area. Both countries were supposed to explore a specific area of international waters and exchange information about their activities. But the accord was doomed from the start as Britain and Argentina adopted different interpretations of the areas they could jointly explore.

Although the agreement has been moribund since 2001, it has taken another six years for the deal to be formally scrapped. Many analysts say the timing of the announcement is more significant than the announcement itself. Left-leaning Argentinean president Nestor Kirchner faces re-election in October. The Falklands decision is a likely vote winner. There is also a personal aspect. Kirchner comes from Patagonia which was the front line of Argentinean military operations during the conflict. He has now called for Britain to discuss sovereignty.

25 years ago, the fate of Las Malvinas was also used to shore up a troubled Argentinean regime. Dictator Leopoldo Galtieri presided over an unhealthy economy with high unemployment, shrinking GDP and 160 percent inflation. He gambled Britain would negotiate if he struck a quick blow and his popularity would then be assured at home. On 2 April 1982, he ordered his navy to occupy the archipelago. In response, Margaret Thatcher dispatched the largest British fleet assembled since the end of World War II.

Galtieri blundered in ordering the invasion before the onset of the Southern winter. With no rough weather to contend with, British forces were able to make a bridgehead on the islands and the 10,000 defending Argentine troops could not deal with both land and air attacks. On 4 May, the nuclear submarine HMS Conqueror sunk the Argentine cruiser General Belgrano in 40 minutes. The attack happened 80 kms outside the exclusion zone and was considered a violation of war statutes. 360 crew members died. Britain shelled the islands for 17 days before launching the invasion.

After several decoys, they landed in force on 21 May at Port San Carlos, a bay located between the two major Falkland islands. Despite a major Argentinean air offensive, the British were able to establish a successful bridgehead. After a week of consolidation, the British moved south to Goose Green where they defeated a numerically superior Argentine force with the substantial help of Harriers, helicopters and naval shelling. By 12 June, they were on the edge of the capital Port Stanley. After two more days, the game was up. General Menéndez ignored an order from Buenos Aires to launch a suicidal counter attack and surrendered unconditionally to Major General Moore. The 11-week conflict was over and the islands were back in British hands where they still remain. The war cost 255 British lives and about a thousand Argentineans. It also caused the fall of Galtieri’s government.

The deaths were a very high price to pay for a barren collection of wet and windy rocks populated by 750,000 penguins, 600,000 sheep and just 2,800 people. But Britain does have a long-standing emotional investment in the South Atlantic. They have governed the islands since 1833 and their influence goes back a lot further still. Although the islands may have been originally sighted by Spanish explorers, the first official discovery was in 1592 by English seafarer John Davis, captain of the sailing ship "Desire". The first recorded person to land on the Falklands was also English - Captain John Strong in 1690.

Explorer Louis-Antoine de Bougainville landed on East Falkland in 1764 and laid claim to the islands for France. Two years later, the Spanish bought the islands from the French. The next 50 years saw British and Spanish naval forces engage in gunboat diplomacy while claiming the islands. Britain invaded Argentina in 1806 and briefly took Buenos Aires. In 1833, a British fleet surprised an Argentine force on the islands and forced them to depart. The British raised their flag and began the settlement that lasts to this day.

The islands played an important role at the beginning of both world wars with the German name Graf Spee popping up in both campaigns. In 1914, British Admiral Sturdee led a squadron of seven vessels against the German Pacific Fleet under the command of Admiral Graf Von Spee. Britain sunk six German boats to win the battle and secure naval supremacy in the southern seas. In 1939, the German pocket battleship Graf Spee was harassed around the islands before being sunk by the English fleet in the Battle of the River Plate.

Despite these events, the islands remained a sleepy outpost well out of the international limelight until the tragic events of 1982. The situation remains tense today. Argentina continues to lay claim to the islands. The 2,800 citizens remain solidly British in outlook. Continued support of the occupation is a serious drain to the British taxpayer. The Falkland garrison cost Britain over a hundred million pounds in financial year 2004-5. Sooner or later, a British government will find this cost untenable and will sit at the negotiating table with Argentina. Oil exploration rights will then replace sheep as the islands' most valuable asset.