The Spanish oil company Repsol has announced it will drill for oil in an area near to the Falkland Islands, around 200 miles off ArgentinaÔÇÖs coastline.
The move comes as UK oil companies begin to drill for oil in the Falklands, despite strong opposition from Argentina.
An oil platform, the Ocean Guardian, which is licensed to the UK firm Desire Petroleum, started drilling in Falklands territorial waters this week, having been towed 8,000 miles from the Cromarty Firth in Scotland.
Repsol has said it will begin to explore for oil in wells in the Malvinas Basin area, which stretches several hundred kilometres from the Argentine mainland to the Falklands Islands, by December.
The fields, in the deep waters of Argentina's continental shelf, are about 150 to 200 miles west of where the Ocean Guardian is. The area is closer to the Argentine mainland than to the Falklands and is in the South American country's territorial waters.
The exploration will avoid waters in dispute between Argentina and the UK.
Repsol's Argentine unit, YPF, is the lead operator of the exploratory project with a 33 per cent stake. Brazil's state-run oil company Petrobras and Pan American Energy also have stakes of one-third each.
Repsol bought YPFÔÇöthe biggest private oil and gas company in Latin AmericaÔÇölast year for around Ôé¼11.8 billion.
Argentina claims sovereignty over the Falkland Islands, despite the fact that they have been under UK rule since the war in 1982 which followed their invasion by Argentina.
The UK regained control during the war, which claimed the lives of 649 Argentine and 255 British service personnel.
With the UK claiming that the Ocean Guardian is operating in its own waters, Argentina has now formally asked the United Nations to bring the UK into talks over the sovereignty of the islands.
Last week it made an attempt to prevent UK oil exploration in the islands by announcing controls on maritime traffic.
It is thought that the islands may hold up to 60 billion barrels of crude oil.
