Falklands Flare Up - Could a New Oil Find Re-Ignite an Old Conflict?

They were not exactly overtaxed, the two officials supervising the polling station at Goose Green Sunday. It was, after all, Sunday afternoon and the population of the settlement – at some 45 people, the second biggest in the Falkland Islands – was enjoying its lunch. Had anyone yet voted in the two-day referendum to decide if the islands should remain a British Overseas Territory? Anyone at all? “I can’t say, I’m afraid,” said the lady who answered the door.

The Falklands’ first commercial oil discovery will make the islands in the South Atlantic rich, bringing the British territory of 2,563 people US$10.5-billion in tax revenue over 25 years. As the bounty transforms the fishing and tourism-dependent economy, tensions may worsen with Argentina, which claims sovereignty over the islands and their mineral wealth. The Latin American country last year threatened to sue any company involved in Falklands drilling and its foreign minister said yesterday the islanders have no right to self-determination.

The Falkland Islands are a windswept archipelago in the southern Atlantic, about 250 nautical miles (290 mi; 460 km) from the coast of mainland South America, claimed by both Britain and Argentina, which calls them the Malvinas. In 1982 the two countries fought a vicious two-month war over them, ending in a complete British victory. In light of the 1982 United Nations Law of the Sea Convention, the major issue remains the resource-rich waters surrounding them, which under UNCLOS terms, provide a 200-mile Exclusive Economic Zone for their exploitation.

The Holy Trinity, a warship used to land the first Argentine forces in the Falklands War with Britain in 1982, has sunk, the navy said. Arturo Puricelli, the defence minister, said the loss of the Holy Trinity was due to "negligence in the best-case scenario, or an attack" aimed at making the government look bad. He did not go into detail.

In the United States, Margaret Thatcher is regarded as the British Ronald Reagan, the "Iron Lady," the Cold War Bodicea who backed America against the Soviet Union, and won. She's also a progressive icon of female power — the first woman premier, a gender barrier that has yet to fall in the U.S.

The British lion south of the border is looking more than a tad scrofulous these days. On 29 July in the wake of a meeting between Argentinean President Cristina Fernandez de Kirchner and Brazil’s Dilma Rousseff in Brasilia, the pair issued a joint communiqué in which Brazil reaffirmed its support for Argentina’s claim to the Falkland islands, which Buenos Aires refers to the as Malvinas.