Argentina is preparing to bring criminal proceedings against companies involved in a major oil development off the coast of the Falkland Islands, escalating a long-running sovereignty dispute as drilling at one of the South Atlantic’s largest undeveloped discoveries approaches.
Javier Milei’s government said it would pursue legal action against several subsidiaries of Navitas, the Israeli energy group that holds a 65 per cent stake in the Sea Lion project. British-listed Rockhopper Exploration owns the remaining 35 per cent.
The move represents the latest attempt by Buenos Aires to challenge commercial activity around the British overseas territory, whose sovereignty Argentina has contested for decades.
The criminal complaint names Navitas Petroleum Development & Production Ltd, Navitas Petroleum Atlantic United, Navitas Petroleum LP, JHI Associates Inc and Eco Atlantic Oil & Gas Ltd, as well as executives associated with the companies.
Argentina has accused the groups of “holding licenses granted by the illegitimate Government of the United Kingdom” to exploit natural resources in the North Falkland Basin.
The proposed legal action would also target directors, managers and other representatives involved in the Sea Lion development.
Oil project at centre of sovereignty dispute
Sea Lion is one of the most significant potential offshore developments in the waters surrounding the Falkland Islands.
The field lies about 136 miles north of the islands in the South Atlantic and is estimated to contain the equivalent of approximately 900mn barrels of oil.
The reservoir sits roughly 1.6 miles beneath the seabed, which itself is located at a depth of almost 1,500ft.
The Falkland Islands Government is expected to receive a 9 per cent royalty on revenues generated by the project, in addition to a 26 per cent corporation tax on profits.
Argentina has repeatedly described oil exploration in waters surrounding the islands as illegal and imposed sanctions directly on Navitas in December 2025.
Navitas rejects that position and says its operations are conducted with the full approval of both the Falkland Islands Government and the UK government.
A spokesman for the company said it had always acted “in accordance with the laws of the Falkland Islands, with the approval of the Falkland Islands Government and with the full support of the Government of the United Kingdom”.
He added: “We wish to emphasise that the law has always been our guiding principle. We have always acted, and will continue to act, in accordance with the law.
“The company is not a party to the dispute between Argentina and the United Kingdom.”
Milei promises response to drilling plans
The dispute has intensified as the Sea Lion development moves closer to drilling activity.
In a national address early on Friday, Mr Milei warned that companies involved in the project could gain access to the oil reserves within months unless Argentina intervened.
He said: “That means that if we do not act swiftly in a few months, they will have the material capacity to access the oil that lies underneath our sea. Something that has never happened before.
That means that our national claim is facing a clear and present danger, and requires a proportional response.
“We will not allow it.”
Mr Milei also threatened to accelerate sanctions against companies operating “under the British occupation” of the Falkland Islands.
His government has increasingly portrayed the development of offshore oil resources as a strategic threat to Argentina’s longstanding claim over the territory, which Buenos Aires calls the Malvinas.
Britain has exercised control over the islands since the 19th century, while Argentina continues to assert sovereignty over the territory. The dispute led to the 1982 Falklands War, after which British control was restored.
Israeli involvement complicates diplomatic picture
The case against Navitas adds an unusual dimension to the dispute because of the company’s Israeli ownership.
The confrontation comes despite a period of unusually close relations between Mr Milei’s administration and Israel.
Earlier this week, however, Israel’s National Security Minister Itamar Ben-Gvir entered the Falklands dispute by accusing Britain of “occupying” the islands and calling for Benjamin Netanyahu to support Argentina’s territorial claim.
His intervention was presented as a response to Labour’s sanctions against Israel over settlement activity in the West Bank.
“The British are not content with merely occupying the territory; they also carry out oil drilling there and steal the money from the Argentine people,” he said.
Mr Ben-Gvir did not refer to the fact that Navitas, an Israeli company, is the principal shareholder in the Sea Lion project.
The episode illustrates the potential for wider geopolitical tensions to become entangled with the commercial development of the Falklands’ offshore resources.
Milei attacks Britain as relations deteriorate
During his national address, Mr Milei also described Britain as a country “in decline” and renewed his pledge to “reclaim” the Falkland Islands.
He argued that changing international circumstances created an opportunity for Argentina to advance its sovereignty claim.
He said: “In the world, the winds are blowing favourably for our claim right now. The Falklands are our future – we need to recover these islands which are nationally relevant. There is no other path forward.”
The increasingly confrontational rhetoric comes as Argentina continues to face deep economic difficulties.
By Wednesday morning, £1 was worth just under 2,050 Argentine pesos, underlining the scale of the country’s continuing currency pressures.
For Buenos Aires, the prospect of commercial oil production around the Falkland Islands has given renewed urgency to a sovereignty dispute that has often remained politically symbolic.
For Britain and the Falkland Islands Government, however, the Sea Lion project represents a potentially transformative source of tax revenues and economic activity.
Argentina’s proposed criminal action is therefore unlikely to remain an isolated legal dispute. As drilling approaches, the development threatens to become a new focal point in the decades-old confrontation over sovereignty, natural resources and control of the South Atlantic.
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