Falkland Islanders face ‘devastating consequences’ if Argentina blocks oil project, says UK

The people of the Falkland Islands face “devastating consequences” if Argentina is successful in blocking development of its offshore oilfield, the attorney general for England and Wales has told an international tribunal.

Ellie Reeves, representing the British government at a hearing of the international tribunal for the law of the sea (Itlos), said billions of pounds vital to the future of the British overseas territory would be lost.

Reeves accused Argentina of surreptitiously seeking to pursue its longstanding sovereignty claims over the south Atlantic islands through an application to the tribunal, which is sitting over two days in Hamburg.

Argentina is seeking a provisional ruling suspending the drilling for oil before further arbitration over the future of the project, which it claims poses an environmental risk.

Ellie Reeves (centre) arrives for the hearing of the case concerning oil exploitation in the south-west Atlantic. Photograph: Gregor Fischer/Getty Images

Reeves told the tribunal: “In reality, what Argentina opposes is hydrocarbon activities for the economic benefit of the Falkland Islanders. What it wants is to take control of those resources for itself.”

Argentina claims Britain’s approval of the Sea Lion project is in breach of a 1976 UN resolution calling on both parties to desist from unilateral action on the islands until the sovereignty dispute is settled.

Buenos Aires wants to force a commitment from the UK that it will “stop the drilling”, in order to “preserve the present situation” before a settlement over the oilfield.

After raising Argentina’s “armed invasion” of the islands in 1982, which she told the tribunal led to “loss of life and military occupation”, Reeves said the Falkland Islanders had a right to exploit their own natural resources, adding that a tribunal that ruled over the law of the seas had no place in settling a sovereignty dispute.

Mario Oyarzábal, the legal adviser to the Argentinian foreign ministry, speaks during the hearing in Hamburg, Germany, on Tuesday. Photograph: Gregor Fischer/Getty Images

Reeves said that suspension of the drilling, which is due to start in March next year, would kill off the Sea Lion project.

“The provisional measures sought by Argentina would prevent the people of the Falkland Islands from developing their natural resources as they are entitled to do so, pursuant to their fundamental right to self-determination,” she said.

“The measures sought would have devastating consequences for the Falklands people. They risk losing billions of pounds in money, which is essential for the islands’ economic development.”

Sir Michael Wood KC, who also spoke on behalf of the UK, said the tribunal could lose member states should it overreach by issuing “provisional” measures that should be used only in exceptional circumstances.

Asked whether the UK would abide by the tribunal’s ruling, Reeves told the Guardian that she respected the institution but that she would not “get ahead” of the decisions.

Speaking earlier on Tuesday, Mario Oyarzábal, chief legal adviser to Argentina’s ministry of foreign affairs, had told the tribunal that the 3,600 inhabitants of the Falkland Islands, had no right to the resources around the south Atlantic archipelago.

Construction of a new hydrocarbons port causeway in the Falkland Islands. Photograph: Sean Smith/The Guardian

“These resources belong to the Argentine people. Some 46 million of them including the 1,247 inhabitants born on the islands whose interests will be duly taken into account.”

He said Argentina was ready to negotiate “all aspects of the question” of the Falkland Islands, which are known as the Malvinas in Argentina, “including the present aggravation of the dispute caused by the UK”.

He accused the UK of refusing to enter talks over the islands while pushing forward on the exploitation of its natural resources in a way that would entrench the status quo.

Oyarzábal claimed that the oil money from the drilling would “finance the very military base and presence that sustains the UK’s de facto control of the territory”.

Port Stanley’s coastal houses sit beneath rugged Falkland Islands hills. Photograph: Sean Smith/The Guardian

Argentina’s case is that provisional measures to suspend the drilling are urgent. The Sea Lion project in the North Falkland basin, led by the Israeli firm Navitas and its British partner, Rockhopper, will start drilling in March and oil will be extracted from 2028 and continue for 35 years. It has the potential to double the islands’ GDP per capita to a cumulative uplift of £8bn over the lifetime of the project. The UK government asked why an application to Itlos had only been made in recent months amid increasingly bellicose rhetoric.

Argentina further claims that it has rights as the “coastal state” to the Falklands. The UK’s lawyers said this claim highlighted that Argentina’s application was “at heart” about sovereignty.

The Sea Lion project has been condemned as unlawful by Argentina’s president, Javier Milei. The tribunal was told by Argentinian lawyers that the permissions given by the UK government for drilling was the “unilateral conduct” of a “colonial power”.

Oyarzábal added: “In the event of a blowout or spill, it is Argentina that would bear its consequences and be called upon to respond, not a state that is 12,700km away.”

UK lawyers responded that the risk of such an incident was low and that the companies involved had mitigated against it.

Argentina invaded the Falklands in 1982 at the cost of the lives of 649 Argentinian military personnel, 255 British military personnel and three Falkland Islanders. The hearing is the first time that substantive matters relating to the islands have been litigated at an international tribunal. In a show of solidarity, Princess Anne arrived in Port Stanley on Monday. The hearing continues on Wednesday.

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