Spanish oil company Repsol is to drill for oil in an area near the Falkland Islands.
It will drill about 200 miles off the coast of Argentina by December.
Despite strong opposition from Argentina, a British oil platform, the Ocean Guardian, started drilling in Falklands territorial waters this week.
Repsol said it would explore for oil in a "few" wells in the area.
The company told the BBC the fields were about 150 to 200 miles west of the Ocean Guardian's location.
Last year, Repsol bought an Argentine company, YPF, the biggest private oil and gas company in Latin America.
Argentina claims sovereignty over the Falkland Islands. It invaded them in 1982, before Britain regain control after a short war.
Leaders of 32 Latin American and Caribbean countries at a summit in Mexico have unanimously backed Argentina over the dispute.
Argentina has formally asked United Nations to bring Britain into talks over the sovereignty of the Falkland Islands.
