Argentine officials privately admit the extension of the hydrocarbons exploration program is part of an effort to "tighten the noose" around Falklands, where Argentine troops fought a 74-day war with British forces in 1982, Argentine news media reported.
Britain repulsed the Argentine forces but Buenos Aires maintains British rule is a vestige of colonialism and the islands belong to Argentina.
With Falklands' oil prospects growing and investors flocking to Stanley, the islands' capital, Argentina is drumming up diplomatic support for its position and tightening sanctions on companies that trade with the Falklands.
As part of the "noose tightening," Argentine President Cristina Fernandez de Kirchner will soon invite international tenders before offering licenses to energy firms to start drilling in the area, the Clarin newspaper reported.
Cabinet chief Juan Manuel Abal Median, cited in the reports, indicated the government planned to encourage companies to drill close to the Falklands in the South Atlantic waters.
Current oil exploration activity, backed by the Britain and Falklands governments, is centered on a South Atlantic basin that is part of the islands' territorial waters.
Argentina's statements in recent weeks have left industry analysts wondering if Fernandez aides want to encourage oil prospectors to venture into an area that is regarded as the British overseas territory's waters.
Seismic studies of an area that includes the Argentine continental shelf are planned in collaboration between Enarsa state-owned energy company and international companies.
Initial estimates for the operation put the cost at $42 million, officials said.
Argentine energy officials cited in the reports said the government wants to look closer at offshore basins believed to hold reserves of crude oil and gas. At least 24 prospects are earmarked for exploration, industry sources told Clarin.
Plans for Argentine forays into the offshore region have existed for some time but the Fernandez administration triggered skepticism about their feasibility for investors after it seized Spanish-controlled YPF energy company. The state takeover of YPF proved a major disincentive for prospective investors.
Fernandez is banking on the Argentine exploration program leading to a major oil discovery as that will give Buenos Aires significant leverage over Britain in diplomatic efforts to win wider international recognition for its argument the Falklands are a disputed territory.
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