Argentina Threatened Mining Company BHP Billiton Oil Drilling Activities in Falkland
February 28th, 2010 | File Under : Companies - Mining Exploration - Oil and Gas
Argentina’s ambassador to Australia has stepped up the pressure on local mining giant BHP Billiton, warning it will face sanctions in Argentina if it pushes ahead with drilling for oil off the Falklands.
Pedro Villagra made the threat as the diplomatic row over the start of drilling, which has been running hot between Argentina and Britain in recent weeks, continued to worsen.
Speaking on the ABC’s current affairs program PM, Mr. Villagra said: ”If they conduct activities they will not be allowed to carry out some activities in the Argentine territory on the mainland.”
Argentina first warned BHP of its dissatisfaction in 2007, said Mr. Villagra, saying they had been sent a ”letter of discomfort” warning of the consequences.
”If they decide to pursue this they may face the sanctions that the Argentine law foresees for these kinds of operations in terms of commercial sanctions of course, legal sanctions (on) the company, its contractors, subsidiary service suppliers,” he said.
His intervention came as oil prices in the US headed towards $US79 a barrel and the International Energy Agency suggested economic uncertainties were likely to peg increases.
BHP holds 14 exploration and production licences in partnership with Falkland Oil and Gas and hopes to start drilling in the next four months.
”As designated operator of the licences, BHP Billiton is progressing plans to fulfill the contractual commitments under the licences. Our efforts at this time are solely concentrated on safely executing our contractual exploration commitments,” a BHP spokeswoman said.
BHP currently has no operations in Argentina but has had interests in gold and copper mining in the past.
British group Desire Petroleum triggered strong Argentine protests when it started drilling its first well off the Falklands last week. The well marks the second attempt to determine whether the Falklands has the potential to become a major new oil province.
Mr. Villagra said BHP’s business in Argentina would suffer if the company started drilling.
The sanctions warning was regarded as an attempt by Argentina to widen the dispute after the failure to get backing for UN action to halt the drilling program in the disputed territory.
BHP said its licences provided rights to explore and, if successful, eventually produce oil and gas from the East Falklands Basin.
BHP Billiton holds a 51 per cent interest in the acreage. Falkland Oil and Gas holds the remaining 49 per cent.
Find More Other News : BHP Billiton - Falkland Oil and Gas - mining giant - Oil Prices - production licences