Argentina has threatened fines, confiscations, and prison sentences for oil executives who operate from the Falkland Islands, claiming new exploration is in breach of United Nations decisions.
The Foreign Office said all oil exploration activities were legitimate and controlled by the Falklands' government, according to the BBC.
Argentina's embassy has said new laws now "provide for prison sentences for the duration of up to 15 years; fines equivalent to the value of 1.5 million barrels of oil; the banning of individuals and companies from operating in Argentina; and the confiscation of equipment and any hydrocarbons that would have been illegally extracted".
"The Argentine government has protested against and rejected all of the United Kingdom's attempts to promote and authorize such hydrocarbon exploration and exploitation activities in the area of the Argentine continental shelf.
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"These attempts are manifestly contrary to Resolution 31/49 of the United Nations General Assembly, which requires the UK and Argentina to refrain from taking decisions that would imply introducing unilateral modifications into the situation of the Malvinas Islands while the sovereignty dispute between the two countries is still pending."
A Foreign Office spokesman said: "Hydrocarbons activities by any company operating on the continental shelf of the Falkland Islands are regulated by legislation of the Falkland Islands government, in strict accordance with the United Nations Convention of the Law of the Sea.
"As such these activities are wholly legitimate and legal. The UK government unequivocally supports the right of the Falkland Islanders to develop their natural resources for their own economic benefit.
"This right is an integral part of their right of self-determination, which is expressly contained in the International Covenant on Civil and Political Rights.
"Argentine domestic law does not apply to the Falkland Islands or South Georgia and the South Sandwich Islands, which are UK overseas territories."