VZCZCXYZ0017
RR RUEHWEB

DE RUEHC #9565 0292126
ZNY SSSSS ZZH
R 292120Z JAN 10
FM SECSTATE WASHDC
TO RUEHBU/AMEMBASSY BUENOS AIRES 0583
INFO RUEHLO/AMEMBASSY LONDON 9064

S E C R E T STATE 009565

SIPDIS

E.O. 12958: DECL: 01/29/2035
TAGS: PINR ENRG EPET MCAP PBTS AR UK
SUBJECT: (S/REL UK) ARGENTINE REACTION TO POTENTIAL
FALKLAND ISLANDS OIL EXPLORATION (C-TN9-01234)

Classified By: ELISSA G. PITTERLE, DIRECTOR, INR/OPS

¶1. (S/REL UK) WASHINGTON ANALYSTS CONTINUE TO MONITOR
DEVELOPMENTS IN THE OIL INDUSTRY CONCERNING POTENTIAL
OFFSHORE OIL EXPLORATION AROUND THE FALKLAND ISLANDS AND THE
POLITICAL IMPLICATIONS FOR ARGENTINA AND THE UNITED KINGDOM
(UK). IN APRIL 2009, BUENOS AIRES SUBMITTED TERRITORIAL
CLAIMS TO THE UNITED NATIONS COMMISSION ON THE LIMITS OF THE
CONTINENTAL SHELF THAT INCLUDED THE UNDERSEA AREAS
SURROUNDING THE FALKLAND ISLANDS. IN RESPONSE, LONDON, IN MAY
2009, SUBMITTED ITS OWN CLAIMS IN THE AREA. IN OCTOBER 2009,
UK FIRM DESIRE PETROLEUM REPORTED THAT IT SIGNED A CONTRACT
WITH A U.S. FIRM FOR A DRILLING RIG THAT COULD COMMENCE
OPERATIONS BEGINNING IN FEBRUARY 2010.

¶2. (S/REL UK) ANALYSTS ARE INTERESTED IN GAUGING
ARGENTINA'S POTENTIAL RESPONSE TO OIL COMPANIES BRINGING A
DEEP WATER RIG FOR OIL EXPLORATION OFFSHORE OF THE FALKLAND
ISLANDS. GIVEN THE CURRENT ECONOMIC CONDITIONS IN ARGENTINA,
IT IS POSSIBLE THAT ARGENTINA MIGHT USE THE PROSPECTIVE OIL
EXPLORATION IN THE REGION AS AN OPPORTUNITY TO ASSERT ITS
CLAIMS OVER THE ISLANDS AND THE WATERS SURROUNDING IT AND USE
A BELLICOSE STANCE AS A WAY TO DISTRACT THE ARGENTINE
POPULACE FROM ECONOMIC PROBLEMS AT HOME. ANALYSTS WOULD
APPRECIATE REPORTING ON THE ISSUE WHICH WOULD HELP ANALYSTS
ANTICIPATE ARGENTINA'S RESPONSE TO OIL EXPLORATION OFF THE
FALKLAND ISLANDS, INCLUDE POSSIBLE MILITARY ACTIONS.

¶3. (U) AS TIME, RESOURCES, AND PRESENT WORKLOAD PERMIT, ANY
INFORMATION POST CAN PROVIDE ON THE QUESTIONS BELOW WOULD BE
GREATLY APPRECIATED. MANY THANKS.

¶A. (S/REL UK) PLEASE REPORT ON ANY ARGENTINE GOVERNMENT OR
MILITARY OFFICIALS' DISCUSSIONS ABOUT PLANNED ACTIONS, ALONE
OR IN CONCERT WITH REGIONAL ALLIES LIKE VENEZUELA, IF AN
OFFSHORE DRILLING RIG BEGINS TO DRILL OFFSHORE THE FALKLAND
ISLANDS. ARE ARGENTINE GOVERNMENT OFFICIALS AWARE OF
POTENTIAL OFFSHORE DRILLING, OR WILL THEY BE SURPRISED WHEN
IT IS ANNOUNCED OR HAPPENS?

¶B. (S/REL UK) ARE THERE DIVISIONS WITHIN THE ARGENTINE
GOVERNMENT OR MILITARY LEADERSHIP ABOUT A POSSIBLE RESPONSE?
ARE THERE INDICATIONS THAT THIS CAN POTENTIALLY ESCALATE INTO
ANOTHER MILITARY CLASH WITH THE UNITED KINGDOM?

¶C. (S/REL UK) WHAT DO ARGENTINE GOVERNMENT OFFICIALS
PERCEIVE TO BE THE COST OF SUPPORTING A BELLICOSE MOVE AS
OPPOSED TO SIMPLY IGNORING THE EVENT?

¶4. (U) PLEASE CITE C-TN9-01234 IN THE SUBJECT LINE OF
REPORTING IN RESPONSE TO THE ABOVE QUESTIONS.
CLINTON