The Falkland Islands are on course to earn £4 billion from a newly confirmed offshore oil field, just as Argentina intensifies its decades-old claim over the British Overseas Territory. The discovery of 900 million barrels of oil in the Sea Lion field, which sits within the Falklands' exclusive economic zone, has fuelled a fresh push by Argentine President Javier Milei to reclaim the islands, which Argentina calls "Las Malvinas."
Milei has insisted he will "act swiftly" to "recover" the islands, which he claims belong to Argentina by law and historical precedent. He said he "will not allow" the Falklands to benefit from the oil windfall while Argentina gains nothing from it.
The Falkland Islands are a British Overseas Territory in the South Atlantic, off the coast of Argentina. Sovereignty over the islands has been disputed between Britain and Argentina for decades, and the dispute remains a source of periodic tension between London and Buenos Aires.
Sea Lion field and its scale
The Sea Lion field lies around 150 miles north of Port Stanley and was first discovered in 2010, though multiple previous attempts to extract the oil have failed. It is expected to start pumping oil in 2028 and is six times larger than the Rosebank field west of the Shetland Islands.
The project could generate £4 billion in revenue over 35 years, equivalent to around £1 million per islander. The Falkland Islands government, which approved exploration in 2024, will take 9 per cent of oil revenues plus 26 per cent corporation tax on profits.
Twenty-three wells are due to be built, creating 200 jobs at sea and on the islands. Oil workers will be helicoptered to the rigs, and a major hotel is planned to support the project. The territory's gross domestic product is predicted to triple, and the Falklands are expected to become energy self-sufficient.
Security costs and economic impact
The Falklands government has pledged to put some of the windfall towards its own security costs, reducing the roughly £500 million Britain spends each year protecting the territory.
Jack Ford, chairman of the islands' legislative assembly, said the Sea Lion project "presents enormous economic opportunities." He added: "We're already seeing the benefit across parts of the UK in the creation of jobs, but the great benefit is to help provide economic security for the Falklands for generations to come."
Argentina's response
Major oil companies have previously been put off investing in the field because of the geopolitical complications surrounding the islands. The project's exposure to Argentine interference was on display this week, when share prices of the UK and Israeli companies leading the project fell following Milei's statements.
The Argentine government has since announced sanctions against Israeli oil company Navitas Petroleum, which holds a 65 per cent share of the project, and UK exploration company Rockhopper, which holds the remaining 35 per cent. Shares in both companies fell by 10 per cent in response to the sanctions.
Rockhopper and Navitas said in a joint statement: "The partnership operates pursuant to valid petroleum licences lawfully granted to it by the Falkland Islands government, a self-governing UK Overseas Territory and with the full and ongoing support of the UK Government."
History of tension over the field
Milei's hostile remarks echo those of a previous Argentine leader. When oil was first struck in 2010, then-president Cristina Fernandez de Kirchner called the British "robbers" and introduced a law threatening criminal charges against any Argentine companies involved in the project.
She spoke of the "extraction of Argentine resources" and declared the country's claim to the islands "inalienable," while also taking measures to isolate the Falklands economically.
UK political reaction
Conservative energy spokesman Andrew Bowie said Argentina's claims should be rejected. "Of course it is right that the Falklands should be able to benefit from the riches in their waters," he said. "I just wish the UK Government would allow our domestic industry to do the same."
