Drilling off the coast of the Falkland Islands will begin next week despite strong opposition from Argentina, the UK territory's government has insisted.
Argentina has said it will widen restrictions on ships heading to the islands to cover all of South America.
The Falklands Legislative Assembly said that the restrictions were "no surprise" but promised that exploration would "commence as planned".
An oil rig from the UK has arrived in the Falklands' waters.
The Argentine government said it was in talks with its neighbours to try to tighten a shipping blockade around the Falkland Islands.
Earlier this week, Argentina announced that all ships heading to the Falklands from its ports would require special permits.
But spokesman Ruperto Godoy said he was confident that neighbouring countries would also co-operate.
The rig, the Ocean Guardian, has been travelling from Invergordon in the Cromarty Firth since November.
Owner Desire Petroleum said its rig "has not gone anywhere near Argentine waters", and it had therefore not sought permission from the Argentine government.
Argentina has threatened to take "adequate measures" to stop British oil exploration in contested waters around the islands.
But in a statement, the assembly said it had "every right" to develop "legitimate business" in hydrocarbons.
Describing the controls introduced by Argentina, it added: "This is a move by Argentina to try and disrupt the oil drilling due to start early next week.
"It is no surprise to anyone that they are behaving in this way, but it is nonetheless disappointing when they do."
The statement said that "all the supplies the industry needs are located here in the islands" and drilling would begin as planned next week, "weather permitting".
The Ocean Guardian will be tethered about 60 miles off the islands over the weekend before drilling begins on Sunday.
The company added that it had not put any additional security measures in place above what was normal for a "routine" operation.
Foreign Secretary David Miliband has said all UK oil exploration in the area was "completely in accordance with international law".
On Thursday, Prime Minister Gordon Brown said the government had "made all the preparations that are necessary to make sure the Falkland islanders are properly protected."
A Ministry of Defence spokesman said the government was "fully committed" to the Falklands, adding: "A deterrence force is maintained on the islands."
After Argentina's invasion of the Falklands in 1982, a UK taskforce seized back control in a short war that claimed the lives of 649 Argentine and 255 British service personnel.
Buenos Aires claims sovereignty over the Falkland Islands, which it calls Islas Malvinas.
It has previously threatened that any company exploring for oil and gas in the waters around the territory will not be allowed to operate in Argentina.
Geologists say the seabed around the Falklands has substantial oil reserves
On Tuesday, Argentine President Cristina Fernandez signed a decree requiring all vessels travelling between Argentina and the islands, or those wanting to cross what Argentina says are its territorial waters en route to the Falklands, to seek prior permission.
Last week, a ship carrying drilling equipment was detained by Argentine officials.
Geologists say the ocean bed surrounding the Falklands could contain rich energy reserves.
Last year, Argentina submitted a claim to the United Nations for a vast expanse of ocean, based on research into the extent of the continental shelf, stretching to the Antarctic and including the island chains governed by the UK.
It is due to raise the issue at the UN next week.
The waters surrounding the disputed islands are considered by the UK to be part of the British Overseas Territories.
But Buenos Aires believes the UK is illegally occupying the Falklands, South Georgia and the South Sandwich Islands.