Anger Over Argentina Threat To UK Oil Firms

Sky (Other OTC: BSYBF - news) sources say Argentina's UK ambassador has been summoned to the Foreign Office over a threat to prosecute UK oil firms.

The threat was made by president Cristina Fernandez de Kirchner in a speech on the 33rd anniversary of the Falklands Conflict.

She vowed to take action against UK oil companies if they drilled in waters around the islands.

Sky News understands Britain considered the comments to be "unreasonable" and the ambassador was given a "dressing down".

There are currently three British firms involved in oil and gas exploration in the Falklands - Premier Oil (LSE: PMO.L - news) , Rockhopper and Falkland Oil and Gas (Other OTC: FLKOF - news) .

They hold stakes in the Zebedee well and want to test for oil and gas in another well in the North Falkland Basin.

They are set to begin drilling and the results are expected at the end of the month.

However, the Argentine government is firmly opposed to the move and has threatened to take them to court.

It warned it "could end with an Argentine judge issuing an arrest warrant against those who operate illegally in Argentine waters”.

The dispute comes after the British government announced plans to spend £280m over the next 10 years on renewing and strengthening Falklands forces.

President Fernandez responded by saying Britain should concentrate on fighting poverty instead of increasing the amount spent on defence.

“What a paradox,” she said, “when there are more than one million Britons eating at the food banks they have had to open in one of the most powerful countries in the world.”

"Don’t worry. Don’t spend another pound sterling on defending the Malvinas,” she added, using the Argentine name for the Falklands.

“Spend your money feeding the English, on providing jobs for your young people and a better quality of life for the British, because we are not a threat to anyone.”