Tensions between the Argentine and Falklands governments exploded into violence when dock workers in La Plata, Argentina, responded to rumors that two Norwegian ships in the harbor had worked earlier for the Falklands.

Argentine President Cristina Fernandez de Kirchner is pursuing a blockade and blacklisting of all ships suspected of dealing with the Falklands. Argentina and Britain went to war over the islands in 1982 but an Argentine force was beaten back after a 74-day conflict and loss of about 1,000 lives.

The hit-and-miss crackdown on vessels perceived to be involved with the British territory has split the South Atlantic shipping trade, forcing some operators to abandon Argentina and others to stay away from the Falklands.

None of this was reflected in the Falklands' stated intention to expand the drilling program through the first part of 2012.

The measures, seen as provocation by Argentine media, include new contracts for a more extensive exploration program.

Borders and Southern Petroleum said it extended a contract for exploratory drilling in the Falkland Islands waters to include at least another two wells. Most exploration has concentrated on the North Falklands Basin, where scientific reports have pointed to a potential bonanza of hydrocarbon reserves hidden deep below the seabed.

Drilling into the seabed, oil companies in 2010 and this year reported modest finds, none yet seen likely to turn Falklands into an oil province of any significance. Prospectors and their share-holders remain upbeat.

DryShips Inc., a Greek dry cargo transporter and oil driller, said its drilling unit won additional contracts to hire out one of its rigs to Borders and Southern Petroleum. The deal is worth about $126 million.

Borders and Southern recently clinched a 90-day contract for the Leiv Eiriksson rig to operate in the area.

DryShips said Borders and Southern declared two optional wells under the existing drilling contract for the semi-submersible Leiv Eiriksson. The rig is known to be able to operate in tough conditions.

The Leiv Eiriksson was completed in 2001 as a fifth-generation, semi-submersible drilling unit. The hull was constructed at Dalian New Shipyard in China, with outfitting in the United States by Friede Goldman Offshore.

The Leiv Eiriksson is headed for Greenland where it will conduct drilling operations for U.K. independent Cairn Energy. The rig is expected to arrive in Falkland waters in October and help with the first drilling in the first quarter of 2012.

The company said it and the government-run Falkland Oil and Gas agreed they will share mobilization and demobilization costs for the rig along with ancillary equipment and services.

Falkland Oil and Gas said it was adequately funded for the 2012 exploration program. However, it added, it is talking to "several parties" with a view to drawing more investment into its plans.

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