Argentina Says It Will Sue Falklands Oil Companies

By KEN PARKS

BUENOS AIRES—Argentina's federal government said Monday it is taking legal action against five U.K.-listed oil companies operating in the waters surrounding the disputed Falkland Islands.
In a statement, the Foreign Ministry said the government will "immediately" file civil and criminal lawsuits against the companies, accusing them of violating tax and custom laws, among other charges.
The ministry also said that it will notify the U.K.'s Financial Services Authority, the British Treasury, the International Organization of Securities Commissions, and the New York Stock Exchange of the legal measures Argentina is pursing against the oil companies.
Earlier Monday, Argentina's Energy Secretariat declared as "illegal" the exploration activities by Desire Petroleum DES.LN -5.10% PLC , Rockhopper Exploration RKH.LN -6.55% PLC, Argos Resources Ltd., ARG.LN -4.23% Borders & Southern Petroleum BOR.LN -5.56% PLC and Falkland Oil & Gas Ltd. FOGL.LN -4.20% in Argentine waters.
That paved the way for the Argentine government to take legal action against the firms.
The Falklands have been under U.K. control since the 1830s, when the U.K. removed a precarious Argentine settlement from the islands.
But Argentina has long claimed sovereignty over the Falkland, South Georgia and South Sandwich islands in the South Atlantic, basing its claims on the geographical proximity and its brief possession of the islands.
Tensions between the two nations have risen since 2010, when U.K.-listed oil companies started drilling for an estimated 8.3 billion barrels of crude believed to be under the waters surrounding the Falklands.
Earlier this year, the Argentine government notified stock exchanges in London and New York that it would pursue administrative, civil and criminal charges against those firms.
Argentina has also threatened similar measures against the shareholders of the companies and their bankers.
It isn't immediately clear what tangible impact if any the lawsuits and administrative proceedings will have on the oil companies, as none are believed to have assets in Argentina.
The U.K. government has said there is no chance of negotiating the sovereignty of the Falklands with Argentina unless the islanders ask for talks.

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