Argentina has threatened to take legal action against British companies involved in oil development in the Falkland Islands - a move described by the Foreign Office as "wholly counter-productive".
The country's foreign minister Hector Timerman said there would be "administrative, civil and criminal" penalties against the companies involved.
He said "the resources of the South Atlantic are the property of all the Argentines", including any oil found off the shores of the islands they call the Malvinas.
A UK Foreign Office spokeswoman said: "These latest attempts to damage the economic livelihoods of the Falkland Islands people regrettably reflect a pattern of behaviour by the Argentine government.
"From harassing Falklands shipping to threatening the islanders' air links with Chile, Argentina's efforts to intimidate the Falklands are illegal, unbecoming and wholly counter-productive.
"We are studying Argentina's remarks carefully and will work closely with any company potentially affected to ensure that the practical implications for them are as few as possible."
Rockhopper Exploration, based in Salisbury, Wiltshire, is the only company so far to strike oil. It has been seeking a two billion-dollar investor to fund crude production from last year's discovery. A spokesman for the company said it would not be commenting on the matter.
The Foreign Office spokeswoman added: "Hydrocarbon exploration in the Falklands is a legitimate commercial venture.
"The British government supports the right of the Falkland Islanders to develop their own natural resources for their own economic benefit. This right is an integral part of their right of self-determination.
"We remain clear that domestic Argentine legislation does not apply to the Falkland Islands or South Georgia and the South Sandwich Islands. The Falkland Islands Government is, as always, entitled to develop both fisheries and hydrocarbons industries within its own waters, without interference from Argentina."