'Argentina to peacefully defend Falklands oil'

Argentina will take "adequate measures" to stop oil exploration off the Falklands Islands, its government said yesterday, but stressed it was not talking about a repeat of the 1982 war with Britain over the archipelago.

British authorities "shouldn't be complacent, because they see that Argentina defends its rights - obviously by peaceful means, such as through bilateral and multilateral action in (international) bodies," Deputy Foreign Minister Victorio Taccetti told Argentina's Millennium radio station.

He stated that Britain was seeking to "unilaterally and illegitimately exploit natural reserves that belong to Argentina, and Argentina will take adequate measures to defend its interests and its rights."

The comments marked a sharp rise in Argentina's saber-rattling over the Falkland Islands, which Buenos Aires calls the Islas Malvinas and insists it owns despite losing a 1982 war against Britain.

That 74-day conflict, which cost nearly 1,000 lives on both sides, reaffirmed the British rule over the islands, extant since 1833.

Buenos Aires, however, is angry that London continues to skirt UN resolutions calling on both governments to renew a dialogue on the sovereignty of the Falklands.

A diplomatic confrontation is brewing.

On Tuesday, Argentine President Cristina Kirchner signed a decree ordering any ship passing through Argentine waters to request permission before going to the islands.

The issue has come to a head because of moves to explore how much oil lies in deepwater deposits offshore from the Falklands. With oil prices steadily climbing again after last year's global financial crisis, and recent advances in deepwater extraction technology, any big finds could mean a bonanza for whichever country owns them.

Current estimates put Falklands reserves at anywhere between eight billion and 60 billion barrels.

But the companies looking to prospect - including Anglo-Australian mining giant BHP Billiton through a partnership with Falkland Oil and Gas - need easy access to close ports to bring in heavy equipment and prepare rigs.

Argentina's requirement that Falkland-bound ships ask permission is problematic for the companies because "the farther they have to go to get supplies, the harder and costlier it is," Mr Taccetti said.

Ms Kirchner's order is also potentially explosive, because Argentina claims the waters surrounding the islands - meaning any ship intending to go to them, even from deeper in the Atlantic, could be challenged by the Argentine navy.

The Falkland Islands lie 450 kilometres off Argentina's southern coast.

Argentina says its territorial waters extend well beyond the archipelago, to the edge of the underwater continental shelf more than 2,000 kilometres away.

The growing dispute has thus far been played down by the British government, which describes Argentina's protests over the oil exploration as only "a matter for the Argentine authorities."

But yesterday, a British lawmaker sitting on a parliamentary group responsible for the Falklands, Andrew Rosindell, called for Argentina's ambassador to be summoned to explain his country's "unacceptable behaviour."