92 Given its potential value, Argentina and the UK have ramped up efforts at exercising ownership rights to the hydrocarbon resources through sovereignty claims (Hanke, 2020). Indeed, international legislation on natural resource rights has been used to support both countries’ claims. According to the 1982 United Nations Convention on the Law of the Sea (UNCLOS), any coastal country or state has a claim to an EEZ up to 200 nautical miles from the coastal baseline of the sea, including all living and nonliving resources of the sea and seabed (United Nations, 2020). This wellestablished international law on resource rights (i.e., that the sovereign subject has exclusive right to dispose of the natural wealth) is not applicable to the Islands dispute as neither country has an official sovereign right to exploit the EEZ’s resources (Ruzza, 2011). Under the Principle of Permanent Sovereignty over Natural Resources (PSNR), a nation claims legal title to an area’s natural resources. Developed through various UN General Assembly resolutions, the principle is an internationally recognized legal means to ensure developing countries, newly independent states, and people(s) living under colonial rule reap the benefits of exploiting natural resources within their territories. As the countries work toward a solution, General Assembly Resolution 31/49 requires the two countries to refrain from “unilateral modification” of the Islands, including any infrastructure. Argentina has used the PSNR title and these resolutions to claim the oil infrastructure development activity of UK oil firms in the EEZ as unlawful. During the 2010 meeting of the UN Special Committee on Decolonization, the Group of 77 and most Latin American states backed Argentina’s claim; many proclaimed the UK was preserving an “anachronistic colonial situation” (Ruzza, 2011). As of 2021, the UK has failed to respond. By 2021, more than a decade after discovery of this field and the UK company Rockhopper Exploration investing hundreds of millions of dollars into oil extraction infrastructure, known as the Sea Lion project, there has yet to be any oil brought to market. With world oil demand falling, Premier Oil, the largest Sea Lion shareholder and Rockhopper’s principal partner, has ceased work on Sea Lion, writing off $200M of their infrastructure investments (Tomic, 2021; Hurst, 2020). Oil prices were hovering around $40 per barrel when this decision was made. According to Rockhopper in August of 2020, to break even, Sea Lion needed at least low-to-mid $40s (Hurst, 2020). By mid-2021, prices stabilized at around $70 (YCharts, 2021). In the meantime, the Islands government extended Rockhopper’s exploration license another 18 months to November 1, 2022 (Offshore Staff, 2021). Argentina sees economic growth and stability opportunities in gaining a larger footprint in the hydrocarbon industry and ultimately maritime jurisdiction control. This may prove detrimental for Argentina. Global opinion on climate change and uncertainties in the nonrenewable energy sector create considerable risks. Short-term challenges like the coronavirus pandemic combined with growing international pressure against hydrocarbons have led to predictions that 10% of the world’s known recoverable oil— hundreds of billions of barrels—no longer will be economically viable to extract (Hurst, 2020). As of 2021, the Sea Lion project is a prime example of that risk; Argentina may have dodged a financial bullet by not further investing in hydrocarbon exploration after the collapse of the Joint Declaration. The uncertainties and the loss of Rockhopper’s investment partner may imply that UK oil firms are losing interest in the area. If in the near term, UK oil firms are losing money and rethinking the political hassles and investments into extraction infrastructure for these fields, renegotiating a new Joint Declaration to share the longer-term risks and rewards should oil prices renormalize at more attractive levels may be favorable to both nations, especially if a Declaration can bring other trade and diplomatic benefits post-Brexit. The Impact of Brexit and the EU-Mercosur Agreement While the UK pursued leaving the EU, Argentina pushed to have the Islands left out of the renegotiated EU-UK trade deal (Taglioni, 2020). The UK’s overseas territories were originally linked to the EU through the UK
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