Argentina stops British-linked ship from docking

Mon Feb 27, 2012 7:24pm GMT

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* Argentina ups ante in spat with Britain over the Falklands

* Britain and Argentina fought a 1982 war over the islands

* Possible oil riches have increased the stakes

By Hugh Bronstein

BUENOS AIRES, Feb 27 (Reuters) - Provincial Argentine authorities stopped a cruise liner flying the Bermudan flag from docking in one of the country's ports on Monday, upping the ante in the country's spat with Britain over the Falklands.

Britain and Argentina fought a 10-week war over the Falkland Islands in 1982 after Argentina invaded the South Atlantic archipelago, which the Argentines call Las Malvinas. The conflict claimed 900 lives.

Tensions have risen before the 30th anniversary of the Falklands conflict this year and oil exploration by British companies off the islands has raised the stakes.

Bermuda is an overseas territory of Britain, which is why the liner was prohibited from docking in the southern port of Ushuaia, capital of Tierra del Fuego province, state news agency Telam said on Monday. (www.telam.com.ar/homepage.html)

"The ship that was not allowed to dock in the port of the provincial capital is the Star Princess, a luxury cruise liner with a capacity of 2,600 passengers," Telam said, adding that the ship had docked there before the recent increase in diplomatic tensions.

London has refused to start talks on sovereignty with Buenos Aires unless the 3,000 islanders want them.

Britain will share in a Falkland Islands windfall when oil starts flowing there later this decade. With taxes and royalties estimated at up to $167 billion, the potential prize may continue to inflame tensions with Argentina.

Sea Lion, a field discovered in 2010 north of the islands by British explorer Rockhopper, will generate $10.5 billion of tax and royalty revenues for the Falklands over its estimated 20-year life, Edison Investment Research said this month.

That windfall could swell to $167 billion over the years, Edison analysts said, if four wells being drilled this year off the southern coast and targeting 8 billion barrels of oil resources come in as hoped.

A top British diplomat warned Argentina this month that Britain would "robustly" defend the Falklands if necessary, but added that his country remained open to talks with Buenos Aires on any issue except the islands' sovereignty.

British Prime Minister David Cameron has vowed to defend the islands "properly."

(Additional reporting By Jorge Otaola; Editing by Jackie Frank)

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