LONDON (Alliance News) - A UN Commission has made a preliminary decision to expand Argentina's waters to include those around the Falkland Islands, which is currently under the rule of the UK, the BBC reported Tuesday.
The news sent shares in some London-listed companies down over fears the decision, alongside the discussion over which nation rules the islands, could affect their operations as they continue to search for oil in the region.
The decision, which is not yet final, follows a move by Argentina in 2009 to expand its maritime territory to include the islands, known as the Malvinas in Argentina. The move will increase Argentina's waters in the South Atlantic Ocean by 35%, according to the BBC.
The Falkland Islands' government is seeking clarification from the UK over the decision.
Mike Summers, chairman of the Legislative Assembly of the Falkland Islands which governs the islands' internal affairs, said: "Our understanding has always been that the UN would not make any determination on applications for continental shelf extension in areas where there are competing claims."
Although not yet binding, the move raises the stakes in the claims by the UK and Argentina to the Falkland Island region, whose waters are being closely explored for oil and gas deposits.
http://www.bbc.co.uk/news/business-35914839
The news will not be welcomed by the London-listed firms operating offshore the Falkland Islands.
Premier Oil PLC and Rockhopper Exploration PLC are working on the substantial Sea Lion project offshore the islands. Argos Resources Ltd holds interest in a licence covering the North Falkland basin that lies around 3.0 kilometres away from the Sea Lion project.
In the middle of 2015, the UK Foreign and Commonwealth Office condemned the Argentinian government's attempts to "destroy the Falklands economy" after a judge ordered the seizure of assets belonging to five companies drilling for oil offshore the islands.
Former Argentinian President Cristina Fernandez de Kirchner made several threats to UK companies operating in those controversial waters with court action before the country's national elections late last year.
In Argentina's presidential election in late November, opposition leader Mauricio Macri become president after beating opposition Daniel Scioli, who had been hand-picked by Fernandez de Kirchner, who was not allowed to run for another term by law.
Premier Oil shares were down 4.2% to 40.46 pence per share on Tuesday, Rockhopper shares were down 4.6% to 27.20 pence and Argos Resources shares were down 1.3% to 3.70 pence.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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