UK Warns of 'Devastating Consequences' for Falklands as Argentina Challenges Sea Lion Oil Project

In a hearing room in Hamburg on Tuesday, the British government told the international tribunal for the law of the sea that the people of the Falkland Islands face "devastating consequences" if Argentina succeeds in blocking development of their offshore oilfield. Ellie Reeves, the attorney general for England and Wales, appeared for the UK and said billions of pounds vital to the future of the British overseas territory would be lost.

Argentina has asked the tribunal, known as Itlos, for a provisional ruling that would suspend drilling before further arbitration over the project's future. Buenos Aires says the project poses an environmental risk. It wants a commitment from the UK to "stop the drilling" and to "preserve the present situation" until a settlement is reached. It argues that Britain's approval of the Sea Lion project breaches a 1976 UN resolution calling on both parties to refrain from unilateral action on the islands while the sovereignty dispute remains unresolved. The hearing is scheduled for two days.

Reeves accused Argentina of using the application to pursue its long-standing sovereignty claim by the back door. "In reality, what Argentina opposes is hydrocarbon activities for the economic benefit of the Falkland Islanders," she told the tribunal. "What it wants is to take control of those resources for itself." She recalled Argentina's 1982 "armed invasion" of the islands, which she said brought "loss of life and military occupation", and argued that Falkland Islanders have a right to exploit their own natural resources under their right to self-determination. A tribunal on the law of the sea, she said, has no place settling a sovereignty dispute. Suspending drilling, due to begin in March next year, would kill the project, she added.

Sir Michael Wood KC, also speaking for the UK, warned that the tribunal could lose member states if it overreached. Provisional measures, he said, should be used only in exceptional circumstances. Asked by the Guardian whether the UK would abide by a ruling, Reeves said she respected the institution but would not "get ahead" of its decisions.

Earlier on Tuesday, Mario Oyarzábal, chief legal adviser to Argentina's foreign ministry, told the tribunal that the islands' 3,600 inhabitants have no right to the resources around the archipelago. He said Argentina respects their interests and way of life, as enshrined in its constitution, but that "what these British citizens do not have is a right to decide to which state the islands belong." The resources, he said, belong to the Argentine people: some 46 million, including the 1,247 inhabitants born on the islands. He said Argentina is ready to negotiate "all aspects of the question", including what he called the present aggravation of the dispute caused by the UK, and accused London of refusing talks while pressing ahead with exploiting resources in a way that entrenches the status quo. He also claimed the oil revenue would "finance the very military base and presence that sustains the UK's de facto control of the territory."

The project itself is led by the Israeli firm Navitas and its British partner Rockhopper, in the North Falkland basin. Drilling starts in March, oil would flow from 2028, and extraction would continue for 35 years. The project has the potential to double the islands' GDP per capita, a cumulative uplift of £8bn over its lifetime. The UK asked why Argentina applied to Itlos only in recent months, amid increasingly bellicose rhetoric. Argentina's president, Javier Milei, has condemned the project as unlawful, and Argentine lawyers described the UK's drilling permissions as the "unilateral conduct" of a "colonial power."

Oyarzábal also raised the risk of a spill: "In the event of a blowout or spill, it is Argentina that would bear its consequences and be called upon to respond, not a state that is 12,700km away." UK lawyers answered that the risk is low and the companies have mitigated against it. Argentina further claims rights as the "coastal state", which the UK's lawyers said showed the application is "at heart" about sovereignty.

The weight of 1982 sits over the proceedings: 649 Argentinian military personnel, 255 British military personnel and three Falkland Islanders died in the war. This is the first time substantive matters relating to the islands have been litigated before an international tribunal. Princess Anne arrived in Port Stanley on Monday in a show of solidarity. The hearing resumes on Wednesday, and the tribunal's decision on provisional measures will determine whether drilling goes ahead in March.