By Marcela Valente
BUENOS AIRES, Sep 29 1995 (IPS)

The British and Argentine governments agreed to put business first with the signing of an oil cooperation accord regarding the exploration and exploitation of oil in the waters surrounding the disputed Malvinas/Falkland islands.

After three years of thorny negotiations, which have frequently been on the verge of failure, the two countries that engaged in armed combat over the sovereignty of the archipelago in 1982 have now agreed to jointly explore the waters off the islands.

The agreement will allow Argentina to participate in developing any oil resources that are found, which would otherwise have been exclusively exploited by the islanders.

And Great Britain has thus made sure that Buenos Aires won’t hinder the work of oil companies that take the risk of exploring in the area.

In order to reach the accord, the two parts agreed that neither will alter in the least their respective positions regarding the legal jurisdiction of the islands – occupied by Great Britain in 1833 – nor will they intepret the understanding in terms of sovereignty.

But the opposition in Argentina begs to differ with that politics-free interpretation.

According to the Radical Civic Union (UCR), the country’s main opposition force, the agreement signed in New York on Wednesday by the two country’s foreign ministers is ambiguous and generates uncertainties, and should be annulled.

And former Foreign Minister Dante Caputo, formerly of the UCR and now part of the centre-left Solidarity Front (FREPASO), charged that with the agreement, Argentina has simply recognised British sovereignty over the islands.

On Thursday, Argentine Foreign Minister Guido Di Tella welcomed the approval of the accord, saying “the trust between the two nations will grow, and positive signals will soon be seen.”

And with respect to the criticism, he said the dispute over sovereignty has been recognised by the United Nations, and that it is a reality that Great Britain “is occupying the territory of the archipelago.”

Following the strategy of this “realistic” and pragmatic vision, the government of President Carlos Menem decided to be the spokesman for the oil companies that have been asking to explore the waters surrounding the islands for possible oil reserves.

Argentina’s former state oil company, YPF, and British Gas, which had already formed an association for the undertaking, were the driving forces behind the accord.

This year, YPF acquired off-shore exploration technology, and is looking into the possibility of joint ventures with SIPETROL from Chile and Brazil’s state-owned PETROBRAS.

The first attempts to find oil off of the Malvinas date back to the 1970s, when the U.S. company ESSO found stocks in two of the 13 wells it explored, near the area of cooperation laid out in the current agreement.

However, at that time the reserves found did not justify the costs of exploitation more than 500 kilometres from the mainland, while today’s lower costs and the advances made since then in the industry now make it profitable.

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