Page last updated at 02:59 GMT, Monday, 22 February 2010

Falkland Islanders unworried by Argentine pressure

Falkland Islands
The oil row has prompted Argentina to impose new shipping controls

After Argentina increased its opposition to planned British oil drilling around the Falkland Islands, the BBC's Rajesh Mirchandani finds the islanders hopeful of a lucrative future.

Low clouds scud through a bright blue sky. They seem to bounce off rugged green hills that frame the slate grey channel of Port Stanley.

In the water by a deserted jetty a dolphin frolics, while yards away in the governor's house it's humans who are merrymaking.

Here in the windswept southern Atlantic, a very British garden party takes place: gin and eccentricity flow freely; effervescent children play croquet on the lawn; ladies in large feathery hats mingle.

This could be a summer's day in Berkshire. Instead we're 300 miles from the coast of Argentina, a country many Falkland Islanders regard as a neighbour, but not neighbourly.

Continuing tension

Yet few here are worried about shipping restrictions imposed by Argentina in protest at imminent oil drilling by British companies.

Betty Turner, who works in the Islands' social services sector, said: "There's always been a political tension. I was born and brought up with that and it's just still there - it's in the background. It's sad."

The Argentine government is attempting to tighten the noose - it's certainly not good neighbourly relations
Lewis Clifton
Byron Marine managing director

"Oil is oil at the end of the day," said Phil Kerney, a vehicle technician, "and governments always fight about oil - no matter where it is in the world."

Argentina claims territorial rights over the Falklands and the seabed around them; similar claims led to war in 1982.

Then, hundreds of British and Argentine troops died fighting over the sovereignty of these islands.

Now it's what may lie off their shores that has sparked another dispute.

Revenue hope

Lewis Clifton won't tell me how much oil he thinks there may be. But it's clear he's banking on a bonanza. Mr Clifton is the managing director of Byron Marine, one of several British and Falkland Islands companies involved in the exploration.

He took me to the dock where tonnes of equipment lie stockpiled, destined for the drilling rig which arrived last week and which is now anchored some 100 miles offshore.

Oil exploration equipment
Geologists think the South Atlantic could be rich in energy reserves

On the dockside were giant anchors, some made of iron, some yellow plastic.

There were also metal tubes called risers, through which the drill will travel to the seabed and beyond. In a warehouse were huge bags of cement: drill holes will be plugged with concrete when the work is finished. It's expected to last until October.

Mr Clifton says he won't bow to what he sees as interference from Argentina.

"The Argentine government... have attempted an economic blockade for the last six to seven years. They're attempting to tighten the noose further.

"That's not good and it's certainly not good neighbourly relations either - and they won't succeed."

According to the Falklands' government, the islands could certainly use the oil revenue.

Development fears

"Everybody's been struggling through the recession," said Emma Edwards, a member of the Islands' Legislative Assembly with responsibility for mineral resources.

She told me the islands' investment portfolio lost a lot of money when stock markets plunged, and there were growing concerns about existing industries.

Falkland Islands garden party
The UK says it wants to co-operate with Argentina on South Atlantic issues

"For the Falklands, it would mean security," she says of potential oil wealth.

"It would mean we'd end up with enough money in the reserves not to have to rely solely on the fishing and the tourism and the farming that we currently do rely on."

Back at the Governor's garden party, a lone piper plays as children dance around him. In the distance the sea shimmers in a perfect blue sky made startlingly bright by lack of pollution. A yacht sails lazily past.

Some here worry if oil starts to flow, people and industry will soon follow, destroying this unique way of life. But in the face of Argentine pressure, they remain stoical and undeterred.

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