What’s the Falklands oil project at the heart of latest UK-Argentina spat? 

The United Kingdom has pledged to defend its interests in the Sea Lion project to develop an oilfield near the Falkland Islands, as Argentina has brought a legal challenge before a tribunal over the offshore oil exploration, citing environmental concerns.

Attorney General Ellie Reeves, representing the UK government at the International Tribunal for the Law of the Sea (ITLOS), said billions of pounds crucial to the future of the Falkland Islands will be lost if Argentina is successful in getting the project blocked.

The Hamburg-based tribunal is sitting for two days as Argentina seeks a provisional ruling to suspend oil drilling.

Reeves also said Argentina’s objection to the development was rooted in its territorial claims. “The hearing is not about the sovereignty of the Falklands,” the UK prime minister’s official spokesman said on Monday, echoing his country’s position that the island’s sovereignty is not up for negotiation.

The dispute is the latest in rising tensions between the UK and Argentina over the British overseas territory in the South Atlantic Ocean.

Here’s what we know:

The Sea Lion development is a UK-Israeli venture to drill for oil in waters administered by the Falklands.

The UK’s Rockhopper Exploration and Israel’s Navitas Petroleum, operator of the Sea Lion oilfield, located about 220km (137 miles) from the islands, are expected to start the project in March 2027, with oil production to begin in 2028.

According to Rockhopper Exploration, the Sea Lion exploration field holds an estimated 1.7 billion barrels of oil in place, of which 500 million barrels are recoverable resources.

However, Argentina’s President Javier Milei announced measures to block the development in September and said in a post on X that he had instructed the Foreign Ministry and the country’s legal teams to initiate arbitration proceedings against the UK.

“If in 2 weeks the United Kingdom does not halt the illegitimate exploitation, we will go to the International Tribunal for the Law of the Sea. THE MALVINAS ARE ARGENTINA’s, and they are defended with facts, not words,” he wrote, using the Argentinian name for the Falkland Islands.

Argentina formally filed a complaint at the Tribunal seeking provisional measures against the UK on October 13.

The UK has administered the Falkland Islands since 1833. However, as the territory lies off Argentina’s shores, Buenos Aires claims sovereignty over what it calls Las Malvinas.

Milei has also threatened tougher sanctions on companies involved in the oil exploration project, preventing them from operating in Argentina’s oil and mining sectors.

Milei’s government argues the project violates a United Nations resolution calling on both sides to refrain from unilateral actions in the islands until their dispute over the territory’s sovereignty is resolved.

What was said at the Tribunal?

On Tuesday, Reeves told the Law of the Sea Tribunal, which issues legally binding rulings on maritime disputes, that Argentina wanted to “take control of those resources for itself”.

“The provisional measures sought by Argentina would prevent the people of the Falkland Islands from developing their natural resources as they are entitled to do so, pursuant to their fundamental right to self-determination,” she said, according to The Guardian.

“The measures sought would have devastating consequences for the Falklands people. They risk losing billions of pounds in money, which is essential for the islands’ economic development.”

But Argentina’s lawyer, Mario Oyarzabal, argued that action was needed to block the project.

“[Argentina] respects the interests of the inhabitants of the islands and their way of life as enshrined in the Argentine constitution…What these British citizens do not have is a right to decide to which state the islands belong,” he said during the hearing, The Guardian reported.

“These resources belong to the Argentine people. Some 46 million of them, including the 1,247 inhabitants born on the islands, whose interests will be duly taken into account,” he added.

In 2013, Falkland islanders voted overwhelmingly to remain with the United Kingdom, despite Argentina’s claims.

What has the UK government said?

On Monday, Prime Minister Andy Burnham’s official spokesperson told the Independent news outlet that the UK was “fully engaged in the UNCLOS [UN Convention on the Law of the Sea] process, and we’ll clearly set out our position on Argentina’s request for provisional measures before the Tribunal”.

“We’ll continue to robustly defend our interests and those of the Falkland Islanders,” the spokesperson added.

Last month, Burnham also discussed the bid to block the oil project during a call with United States President Donald Trump.

“The prime minister raised the economic consequences of Argentina’s coercive measures for the UK and US and reiterated the importance of respecting the islanders’ right to develop their natural resources,” Burnham’s office said.

What are the latest developments?

The fraught relationship between the UK and Argentina remains tense and heavily focused on the Falkland Islands.

Milei has capitalised on Trump’s refusal to say whether Washington would support the UK in a future conflict over the Falklands after the US president criticised London for not doing more to support the US during its attacks on Iran.

In September, Milei said the “winds of change” were blowing in Argentina’s favour when it comes to its claims of sovereignty.

“The United States is considering this change in position because it knows that Argentina has a reliable partner, aligned with Western values, in a strategically important position that can be a valuable ally in the decades to come,” Milei said.

At the same time, Argentina is set for an election next year, where the Sea Lion project’s halt could help Milei’s polling position.