THE Argentine government is to offer licenses to explore for oil near the Falkland Islands, Clarin reported today, citing a letter sent to the Argentine Congress by Cabinet Chief Juan Manuel Abal Medina. However, the Argentine government has sinced denied that this is the case.

Earlier reports said the national and international bidding process would be carried out by Energia Argentina SA, the state-owned company known as ENARSA.

GC Technology Corporation had conducted a programme of seismic acquisition aimed at, "obtaining improved geophysical and geological comprehensive understanding of the offshore," and included the purchase of 2-D seismic data on 11,000 km of the Argentine continental shelf, however, the Argentine government said no call for exploration had been made.

Clarin speculated that if oil was found in the waters located beyond the control of the UK  Argentina would have a real geopolitical tool that could be used in a hypothetical negotiation with Great Britain.