Falklands War II?

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AT SOME point today, weather permitting, the Ocean Guardian, a rusty but reliable Scottish oil rig, will start drilling in the South Atlantic.

It has taken two months to tow the 24-year-old Clyde-built semi-submersible from its home off Nigg in the Cromarty Firth to the shallow seas just north of the Falklands. And every mile of its journey has brought Britain and Argentina closer to their biggest crisis since they fought a bloody war for the islands in 1982.

"The Malvinas will never be surrendered," said Cristina Kirchner, Argentina's glamorous but struggling president, using the Spanish name for the disputed archipelago.

Britain, which has held the Falklands since 1833, has made it equally clear it is ready to stand up for its rights to the potentially resource-rich seas around them. Prime Minister Gordon Brown said the UK had "made all the preparations that are necessary to make sure the Falkland islanders are properly protected".

The British rhetoric has not gone down well in Latin America, more than a quarter of a century after the last war in the South Atlantic cost nearly 1,000 lives. "The British are desperate for oil since their own fields in the North Sea are now being depleted," Venezuela's maverick socialist president Hugo Chavez said yesterday. "When will England stop breaking international law? Get out of there, give the Malvinas back to the Argentine people. Enough already with the empire."

At stake are an estimated 3.5 billion barrels and nine trillion cubic metres of gas. The current oil price is $76 a barrel. That means there could be more than a quarter of a trillion dollars worth of hydrocarbons off the Falklands. And that, analysts are pretty sure, would be worth fighting for.

There are some chilling echoes of 1982. Back then it was widely rumoured to be "all about the oil rights". But some theorists believed it was about a female premier seeking popularity with her electorate. This time the female premier needing a boost is Argentine. So could Britain and Argentina really go to war again?

Military planners already know what a new conflict in the South Atlantic would look like. They can even guess just how it might start: by accident.

The scenario is straightforward. An exploration ship or rig from the UK firm is bobbing about in the swell somewhere off the Falklands. The Argentines have declared that the British vessel is in their waters and have sent a warship to "police" the scene. Or protesters, perhaps in Greenpeace-style rib boats, are buzzing the British. The two sides end up in the kind of maritime stand-off currently being seen between whalers and environmentalists elsewhere in the region. The nightmare? That the British and the Argentines somehow collide on the high seas. Navy or civilian ships could ram each other, tempers flare.

Britain has been in a conflict like this before, in the early 1970s. Then the UK was disputing Iceland's exclusive economic rights over its waters. The result was the Cod War, when British and Icelandic vessels rammed each other and two otherwise highly friendly countries almost came to serious blows over fish.

Such a fight over an even more valuable commodity, oil, and between two countries who haven't always seen eye to eye, could be much more serious.

Former navy commander Michael Codner saw "action" in the Cod War – although he admits the dispute in the North Atlantic was "good fun" at times. Now director of military sciences at the Royal United Services Institute, Codner is watching the South Atlantic carefully. The Argentines, he said, would be "unlikely" to try to invade the Falklands in the way they did back in 1982. The corrupt, weak military junta in power back in the 1980s is long gone – along with most of the nation's military prowess. "Argentina does not have a substantial naval capability," Codner said yesterday. "They may, however, feel able to carry out some kind of constabulary operation, say warships preventing oil vessels from operating. You could then have an incident at sea."

There are haunting similarities between 1982 and 2010. The Argentines were desperately weak then and now. The old government of dictator General Leopoldo Galtieri invaded the Malvinas to distract attentions from its domestic failings. Kirchner's new, democratically elected government is running into serious economic problems. Her government is due to pay back $13 billion (8.4bn) of international debt that matures this year, on top of a budget deficit of up to $7bn.

Kirchner's ministers yesterday desperately played down the prospect of armed conflict. Argentina's deputy foreign minister Victorio Taccetti yesterday said his country would do all in its power to stop shipping between South America and the Falklands – but no more. "We are trying to convince the British that it is in their interest to negotiate with Argentina," he said. "This is not an escalation, this is just something that we have to do in order to protect our rights – because we consider that this exploration and eventual exploitation of our natural resources is illegal."

The British government too was weak in 1982. Margaret Thatcher was the most unpopular prime minister for a generation. The same, cynics pointed out yesterday, can be said of Brown. But Brown has inherited a Falklands Islands that are far better defended than they were in 1982.

Codner said: "The British have Port Stanley Airport and there are a thousand troops there and four Typhoon fighters. As long as Britain can hold on to Port Stanley Airport they can defend the Falklands by air. The MoD will have dormant plans which could be activated pretty quickly."

So Britain, as long as it prevents a commando-style raid on its fortified Port Stanley – should hold on to the islands.

Both Britain and Argentina would have to overcome major logistical problems if they wanted to invade the Falklands by sea.

The Argentines have decommissioned the rusty hand-me-down Second World War warships they relied on during the 1982 conflict (The Belgrano, whose sinking with the loss of 353 lives effectively ended any hope of a peaceful resolution, was launched in 1935 as the USS Phoenix and survived Pearl Harbour in 1941 before it was sold to the South Americans a decade later).

The Armada of the Argentine Republic, to give the Argentine navy its proper title, is essentially now made up of a main fighting force of four destroyers and six frigates, all of which were ordered shortly before the 1982 conflict and delivered a few years later. They are far from state of the art. Crucially, however, the Armada has retired its only landing craft, the Cabo San Antonio, an ageing ship that played a key role in putting Argentine armour on the Falklands during the war.

So Argentina, despite being just 300-odd miles from the islands, would have real difficulties launching an amphibious attack.

The Royal Navy, meanwhile, has also undergone major changes in the last 30 years. In 1980 it had 162 surface vessels and submarines of all kinds. Now it has 88. The navy still has two ageing aircraft carriers, HMS Illustrious and HMS Ark Royal, on active service, pending the arrival of delayed replacements to be built on the Clyde. And it keeps a third carrier on reserve, the 33-year-old HMS Invincible, a veteran of the Falklands Task Force.

But naval analysts admit Britain would struggle to project a major naval force 8,000 miles into the South Atlantic today. The problem, they say, would be a lack of escort ships.

The navy currently has seven destroyers and 17 frigates, compared with 13 and 53 respectively back in 1980. True, its old Type-42 destroyers, some of which saw service in the Falklands, are being replaced by the much bigger and more powerful Type-45 vessels currently being built on the Clyde.

The navy, unlike the Argentines, can carry out amphibious assaults. It has a helicopter carrier, four landing ship docks and two landing platform docks. But they would have to get to the Falklands safely.

The navy – sidelined as the UK focuses on the war on terror – is eager to prove its 21st-century relevance. The Falklands, Codner said, shows why the senior service is still vital to Britain's future.

The UK, after all, must be able to defend the more than 200,000 people who live in overseas territories such as the Falklands. "This wouldn't be a 'war of choice' like Iraq or Afghanistan," he said of a potential attack on the islands. "An attack on the Falklands would be exactly the same as an attack on the UK mainland. Britain would have an obligation to defend. It would be a sine qua non."

Britain could sit back and let Argentina fish waters off the Falklands or drill for oil in them. "But that encroachment could become institutionalised and would be very hard to reverse," he said. You only have to look at how Britain tried – and ultimately failed – to defend traditional fishing grounds in Icelandic waters to see how tricky such a situation could be."

On the Falklands, islanders were this weekend trying to put thoughts of Argentina behind them. They have come to shrug off the rhetoric from the west, which can blow hot and cold. In the 1990s the Argentines sent a Christmas card to every islander in an overture of peace. Falklands children were sent Pingu videos from the Argentine government. Now the mood has changed.

Stuart Wallace, the son of a Dundee-born Scot who has lived on the island for 50 years, was yesterday unimpressed by the threats. "It is the summer here," he told Scotland on Sunday. "The weather is misty and overcast but we are still going to go and fish for some brown trout in the San Carlos River. I am taking my two-and-a-half-year-old granddaughter. We might not catch anything but we certainly won't be thinking about the Argentines."