ARGENTINA ENDS FALKLANDS/MALVINAS OIL AND GAS

C O N F I D E N T I A L BUENOS AIRES 000603 SIPDIS SIPDIS WHA/BSC FOR BARNES, FRIEDMAN, AND BLAKENEY EUR/UBI FOR ROY AND PEASE E.O. 12958: DECL: 03/28/2017 TAGS: PGOV PMIL KTIA AR UK SUBJECT: ARGENTINA ENDS FALKLANDS/MALVINAS OIL AND GAS ACCORD Classified By: Ambassador E. Anthony Wayne for reasons 1.4 (B) and (D) ¶1. (C) Summary: On March 27, Foreign Minister Taiana announced that the GOA would end a 1995 accord with the UK aimed at encouraging cooperation on oil and gas exploration around the Falklands/Malvinas islands. He maintained, however, that the GOA will continue to abide by the 1989-1990 sovereignty umbrella agreement but reiterated GOA demands for renewed sovereignty talks. The Casa Rosada separately announced that Kirchner will not attend the 25th anniversary commemoration of the Falklands in Ushuaia as originally anticipated, and that Vice President Scioli will attend instead. ¶2. (C) Publicly, the UK Embassy expressed regret that the GOA decided to &send a political message during a sensitive year8, given that this year marks the 25th anniversary of the conflict. On March 28, British DCM Andrew Jackson told DCM that while the UK regrets the decision, the UK was not reading too much into it, given that the accord had been dormant since 2000. He stressed that the UK was "bending over backwards to be constructive" on the Falklands and pointed to the UK's decision to allow 400-500 veterans and next of kin of fallen Argentine soldiers to participate in a private event inaugurating a memorial in the Argentine cemetery on Darwin. Jackson suggested that Kirchner's decision to walk away from the 1995 accord was an electoral ploy to score points domestically. Jackson, and the Buenos Aires press, speculated that Kirchner opted out of the commemoration event in Ushuaia, Tierra del Fuego to avoid attracting attention over public sector strikes in the province and nearby Santa Cruz province. Although Kirchner will likely commemorate the anniversary with a tough message to London, the Deputy Defense Minister told the Ambassador that he will likely criticize the military dictatorship's decision to use Argentina's claims over the islands as a pretext for war. At the same time, we believe Kirchner will likely reiterate previous statements that the GOA wishes to resolve the sovereignty question through diplomatic means. End Summary. -------------- -------------- Agreement Terminated, Kirchner Cancels Commemoration Trip -------------- -------------- ¶3. (SBU) On March 27, Foreign Minister Taiana announced that the GOA would end a 1995 accord with the UK aimed at encouraging cooperation on oil and gas exploration around the Falklands/Malvinas islands. The decision comes six days before the 25th anniversary of the Falklands/Malvinas war. According to local press reports, Taiana justified the decision by stating that the UK had "unilaterally" decided to issue licenses for oil and gas exploration near the disputed territories. Taiana further contended that the UK intended to limit cooperation with Argentina to an area of only 21,000 suare kilometers, while reserving an additional 410,000 square kilometers for the UK's exclusive use. He claimed the UK has used the agreement to justify its "illegitimate claims over the islands" and noted that the accord had been &frozen8 since 2000. Taiana insisted, however, that canceling the accord did not mean the GOA would walk away from the 1989-1990 sovereignty umbrella agreement. He also maintained that the GOA is not opposed to cooperating with the UK, but that cooperation should lead to a renewal of sovereignty talks. ¶4. (SBU) The press also reported a separate Casa Rosada announcement that Kirchner will not attend the 25th anniversary commemoration of the Falklands in Ushuaia as originally anticipated. Vice President Scioli will reportedly fill in for Kirchner, and Taiana and Interior Minister Fernandez are also expected to attend. Government officials said the cancellation was due to "work issues," but there is public speculation that unrest among state workers in Tierra del Fuego and nearby Santa Cruz (Kirchner's home province) could have made the trip politically unsuitable. ¶5. (SBU) Publicly, the UK Embassy expressed regret that the GOA decided to &send a political message during a sensitive year8, given that this year marks the 25th anniversary of the conflict. It also announced that the UK, in conjunction with the Falkland Islands Council, had agreed to allow Argentine veterans and next of kin to visit the Argentine cemetery in Darwin to inaugurate a memorial to Argentine soldiers who died in the war. In addition, the UK Embassy reiterated HMG's invitation for the GOA to participate in a commemoration ceremony on June 14th of this year. The GOA has declined the invitation, noting that the UK intended to commemorate the war on the day Argentina surrendered after the 10-week war. -------------- -------------- UK: Decision is Electoral--but don't read too much into it -------------- -------------- ¶6. (C) On March 28, DCM met with British Deputy Head of Mission Andrew Jackson to discuss the GOA decision to end the accord. Jackson began by noting that the Argentine press inaccurately reported that FM Taiana had called Ambassador Hughes in on March 27 to inform him of the GOA decision. Rather, Ambassador Hughes was to meet with Taiana to discuss the UK's proposal to restart charter flights from Argentina and other South American countries to the Falklands islands, noting that such flights represented economic opportunities for both Argentina and the Falklands. (Note: At present, LAN airlines is allowed to stop in Rio Gallegos, Argentina once a month on its Santiago-Stanley via Puerto Arenas flight.) Instead, Ambassador Hughes met with Deputy Foreign Minister Garcia Moritan, who explained that the GOA was more interested in resuming scheduled flights to the islands rather than charted flights. At the end of the meeting, Garcia Moritan passed a letter to Ambassador Hughes informing him of the GOA's decision to walk away from the 1995 oil and gas accord. ¶7. (C) While the UK regrets the decision, Jackson stated that the UK was not reading too much into it, noting that the Argentine-UK commission on oil and gas exploration around the Falklands islands had been dormant since 2000. He thanked the USG for weighing in with the GOA last July urging them not to take any unilateral action to change the status quo. He noted that other commissions such as the fisheries and demining commissions had been much more active. Jackson mentioned that both countries met two weeks ago to discuss fisheries issues where they decided to conduct a joint fishing cruise at the end of the year. Jackson acknowledged that the fisheries commission had not been functioning very well and viewed the decision to conduct the joint cruise as a positive sign that the Argentines want to keep the dialogue going. He also asserted that the UK was "bending over backwards to be constructive" on the Falklands, including: 1) inviting 400-500 veterans and families of fallen Argentine soldiers to a private event at Darwin Cemetery in November of this year; 2) sharing fisheries data with the Argentines; and 3) agreeing to conduct a joint feasability study on demining issues. ¶8. (C) Jackson suggested that Kirchner's decision to walk away from the 1995 accord on the eve of the 25th anniversary was based on electoral politics. That the GOA chose to walk away from the oil accord as opposed to the fisheries accord indicates that the GOA wanted to send a signal to London without damaging Argentina's economic interests, Jackson indicated. When asked about the Casa Rosada's announcement that Kirchner would not participate in a planned April 2 commemoration event in Ushuaia, Tierra del Fuego, Jackson speculated that Kirchner had opted out of the event to avoid attracting attention over public sector strikes in the province. Nevertheless, he still expects Kirchner to commemorate the anniversary with a tough message to London. -------------- Domestic Traction At What Cost? -------------- ¶9. (C) Comment: The Kirchner administration has pushed its claims to the islands harder than any other recent Argentine administration and is using the 25th anniversary as an opportunity to again push the issue--a move that plays well to nationalistic sentiments here. Kirchner's latest attempt to pick a fight in the international arena again exemplifies the administration's intent to make foreign policy decisions largely for the political traction it wins at home; the announcement was aimed primarily at domestic audiences with a view to the October presidential elections. Although the decision is one of the most drastic measures taken since the GOA reestablished diplomatic ties with the UK in 1990, the practical effects on Argentina, the UK, and the islands are likely to be minimal. ¶10. (C) Kirchner's decision not to participate in the 25th anniversary commemoration, however, may reflect a recent penchant for distancing himself from his own controversial foreign policy decisions. We note that Kirchner and much of his Cabinet were inaugurating an international film festival in Mar del Plata during Chavez's March 9 anti-U.S. rally. On the other hand, Kirchner has been getting much bad press, over strikes in his home province of Santa Cruz and may not have wanted the prospect of similar protests in Ushuaia. ¶11. (C) Still, Kirchner most certainly will comment on the occasion. Deputy Minister of Defense Ocampo told the Ambassador that Kirchner's anniversary remarks will underscore Argentina's valid claim to the islands, but criticize the military dictatorship's decision to use this as a pretext for a war that was poorly planned and executed. At the same time, we believe he will likely reiterate previous statements that the GOA wishes to resolve the sovereignty question through diplomatic means. Still, Kirchner's decision demonstrates yet again that he is willing to risk damaging bilateral relationships for short-term political gain--witness the GOA's dispute with Uruguay over pulp mills and its fight with Chile over gas supply contracts. Kirchner's pugnacious style is not limited to the foreign arena. In recent weeks, he has criticized the Catholic Church for siding with Santa Cruz protesters demanding higher wages and his Interior Minister, Anibal Fernandez, has publicly suggested that the head of Argentina's highest Criminal Appeals Court to "quit for the good of the country" when he characterized Kirchner's March 24 call to speed up human rights trial as "judicial interference." As the electoral season heats up in earnest, we can expect Kirchner to continue his confrontational antics. WAYNE