By John Roberts on March 3, 2010 3:18 PM

For all the hype that the waters off the Falkland Islands might contain as much as 60 billion barrels of oil, it's enough to say that just a single gusher could be all that's needed to make the Falkland Islanders the richest energy producers in the world. But if the inhabitant of the windswept islands -- ruled by Britain but claimed by Argentina -- are to reap the full benefits of any oil that might be discovered, then they will have to hope that the politicians in London and Buenos Aires can finally broker a settlement to their long-running dispute.

It's the tiny size of the islands' population that makes it possible for a single well to produce enough oil to secure the islanders a per capita income exceeding that of Abu Dhabi or Brunei -- and to make them feel all the more vulnerable to Argentinian efforts to regain control over their South Atlantic home.

At present there are just 3,100 regular inhabitants of the islands -- that is, excluding the UK military garrison of around 1,300 to 1,400 troops. In island terms, that's large. In April 1982, when the Argentinians invaded and began a ten week occupation, there had been just 1,800 residents actually living on the Falklands -- or the Malvinas, as Buenos Aires calls them.

In terms of oil revenues, the math aids the islanders. Take a look at Abu Dhabi. The emirate has 1.75 million people and produces around 1.9 million barrels a day for export. At $80 a barrel -- roughly the current price -- that amounts to $86.86 a day for every man, woman and child in Abu Dhabi. Or, to put it another way, that means the emirate derives an annual per capita income of around $31,700 a year from its oil exports. As for Brunei, often regarded as the quintessential oil-rich territory, its per capita income from exports is around $36.84 per day or $13,450 a year.

So what would it take for the Falklands to secure such wealth? Since the UK has assigned all income from mineral resources around the islands to the islands' administration, then to secure the same $86.86 per capita income as Abu Dhabi would require production of just 3,365 barrels a day.

But if one gusher could produce volumes on this scale, what would happen if the islands actually became a significant producer in global terms? After all, if they could just get up to producing 100,000 b/d, they should have a daily per capital income of $2,581 and an annual per capita income of $942,000. And if prices or production were just a trifle higher, then the islands would be earning a million bucks a head for every man woman and child living there.

Of course, in reality it's not so simple. There's the question of how many people would be needed to develop the oil, and of where the base facilities for Falklands oil exploration might be located.

The logical answer, of course, is the Argentinian mainland. In the 1990s, when the UK was hoping to see some kind of joint venture development of whatever resources might be found in the waters between the islands and the South American mainland, there was a prevailing assumption that some port of southern Argentina might play the role in the South Atlantic that Aberdeen and Stavanger play in the North.

The British government would likely favor such a move. But it's not likely so long as Argentina maintains its position that it will have nothing to do with companies involved in Falklands oil exploration. As for the islanders, they are likely to remember that when the UK government in London moved to strengthen relations between Argentina and the Islands in the 1970s, notably by ensuring that all transport links and even postal services were routed through Argentina, these gestures were followed by military invasion

The Falklands/Malvinas still constitute a remarkably difficult conflict to resolve. Argentina is absolutely convinced that it has right on its side, when it argues that the islands are part of its sovereign territory. And, indeed, there was a brief period of direct rule by the independent authorities in Buenos Aires (it was before the Republic of Argentina was formed) in the early nineteenth century. In legal terms, Britain's case is not particularly strong. It was Britain's most famous general, the Duke of Wellington, who declared: "It is not clear that we have ever possessed the sovereignty of these islands." He said that in 1829, when he was prime minister -- just four years before the Royal Navy landed troops on the islands, overthrew an ad hoc regime set up by some US buccaneers, and began the process of British settlement of the islands.

Today, the settlers consider themselves British, and that's the nub of the problem. Is the Falklands/Malvinas a colonial issue to be settled by London and Buenos Aires or do more recent principles, notably those pertaining to self-determination, now apply? And that's where the Falklands' population figures may again assume importance. The islanders themselves want to be British. But there are only 3,100 of them -- enough to make them millionaires if it turns out that there is even a modest amount of oil in the offshore waters -- but it's a small number to set against the forces of great power politics, particularly if there's oil involved.