An Oil War?

 British ministers were keen to exploit oil around the Falkland Islands before and after the 1982 conflict, declassified British government documents show.

Declassified documents show that Britain has long been interested in oil around the Falkland Islands. In 1975, an energy department official wrote: “Our ministers are very interested in the possibility of exploiting offshore oil around the Falkland Islands.”

Before the Falklands war, Britain vigorously defended its claim to potential oil reserves around the islands. Britain formally protested when Argentina commissioned seismic surveys off the Argentine coast in early 1977. An energy department official wrote that the “worst thing would be to do nothing” as this could lead to “our giving up without so much as a whisper the title to any oil which might lie beneath the sea outside the 200-metres line”.

Britain protested again in 1981 when Argentina auctioned more exploration licences. A Foreign Office official wrote: “We must maintain that any oil in the Falkland Islands continental shelf is British, without specifying whether we mean HMG or Falkland Islands have the right to exploit it. The important point is that it is ours not Argentine.”

In July 1980, Margaret Thatcher’s government held secret talks with Argentina and proposed a “leaseback” deal, whereby the sovereignty of the islands would be transferred to Argentina but then leased back to Britain.

While ministers were considering the idea, the energy secretary, David Howell, wrote to the foreign secretary, Lord Carrington, on 5 February 1980, saying: “I hope … you will not lose sight of retaining, if at all possible, access for the UK to any oil or gas which might be found in Falkland Island waters.”

He repeated this plea in a letter to Thatcher later that month. The cabinet’s defence and oversea policy committee, which included Thatcher, agreed on 7 November 1980 to seek the islanders’ approval of a leaseback deal.

Ministers noted: “It would be important to make satisfactory arrangements for any oil that might be discovered … Further thought should be given to ways in which the United Kingdom might be guaranteed entitlement to a substantial part of the revenues.”

In a previously unpublished letter, the former chancellor Norman Lamont said the revenues from Falklands oil should go to the British government, not the Falkland islanders.

“I have no doubt that in the event of a major oil find, tax revenues should accrue to the UK exchequer. That seems to me only equitable given the very substantial financial as well as other sacrifices that the UK has made … to secure the freedom of the Falkland Islands,” Lamont wrote to the then foreign secretary, Douglas Hurd, on 21 October 1991.

Declassified files reveal British interest in Falkland Islands oil | Falkland Islands | The Guardian