Desire Petroleum: Argentina row no threat to Falklands oil drilling

Argentina's move to block the activities of British oil companies in disputed Falklands Islands territory will not affect drilling programmes, according to Desire Petroleum. The South American country said this week that any vessels sailing from its ports to the Falklands would need a government permit, having last week warned the UK over plans to begin drilling off the islands' coast.

This month, Desire Petroleum started towing a rig to the Falkland Islands from Scotland, after a decade of preparation for drilling off the islands. It is due to arrive by the end of the week, reviving drilling there after a decade of inactivity.

On Wednesday, the UK-listed explorer said it was planning to push ahead with its projects, insisting its drilling programme would not be affected by Argentina's claims of sovereignty over the waters.

"This whole situation has unfortunately been anticipated for months," a Desire spokesman said. "Desire's logistics are unaffected."

Andrew Rosindell, a Conservative MP and secretary of the all-party Parliamentary group on the Falklands, called for Argentina's ambassador to explain its "unacceptable behaviour" to the Foreign Office. "It is 28 years since the Falklands War and it has been made clear to Argentina that they have no say over the Falkland Islands or their territorial waters and they should not try to interfere with them."

The Foreign Office said regulations governing Argentine territorial waters are "a matter for the Argentine authorities".

Desire, whose share price has tripled over the past year, is one of several companies planning to drill in the Falkland Islands, where up to 60bn barrels of oil may lie.

A number of City analysts have recently referred to the current investment interest in the area as "Falklands fever", with Rockhopper, Falkland Oil & Gas, and Borders & Southern all seeing their share prices rise sharply.