There is little point negotiating with Argentina over the fate of the Falklands, the islands governor says, arguing the residents all want to be British and have self-determination.

"The difficulty is even down to the word dispute, we don't recognise it is a dispute," Governor Nigel Haywood told AFP, as the remote South Atlantic archipelago marks the 30th anniversary of the Falklands War.

"The islands are British, we have full rights on the islands, the islanders themselves want to be British. The only dispute is Argentina challenging that right. It therefore follows that negotiations make no sense."

Ahead of Monday's anniversary of the start of the 74-day conflict, the spotlight is once again falling on the Falklands held by Britain since 1833 but claimed by Buenos Aires as an Argentine territory.

Three decades on, life is also poised to change for the 3,000 residents of the windswept South Atlantic chain as oil exploration begins off the coast, promising a potential windfall for the islanders.

Haywood said any discovery of large oil deposits would pose challenges, although no money has yet started flowing toward the islands which lie 650 kilometres (400 miles) off the southeastern tip of Argentina.

"We've got exploration but no production. So number one is what can we do to get production here and what we can do as a government is to make sure that all our government structures are transparent as possible," he said.

"The second is what does oil production look like and there's a whole range of schemes around the world. We are clear here that the production will take place offshore, not just production, but actually there won't be any onshore processing, it will be shipped away to be processed somewhere else."

Another challenge will be protecting the unique environment -- about a million penguins nest every summer on the islands which have earned the nickname of being one of the world's penguin capitals.

Buenos Aires, which has stepped up a heated war of words with London with the anniversary looming, was furious when Britain allowed oil exploration to begin offshore in 2010.

"If oil happens it will happen quite quickly and we need to be prepared as much as we possibly can," Haywood added, saying it could boost local employment and bring more people to the Falklands.

He is also not intimidated by the current spat between Britain and Argentina, saying it all helps put the Falklands back on the global map.

"The constant Argentine pressure on us has meant that people like you came down here to see what the fuss is all about. It's a huge opportunity to tell the outside world our view."

While the islands are self-governed, the British government is responsible for their defence and foreign policy.

But Haywood admitted that a current blockade which Argentina is seeking to impose on ships flying the Falklands flag was making life harder.

"It's pretty clear that Argentina with every step tries to make life more difficult down here," Haywood said, maintaining Buenos Aires was trying to force people into negotiations.

"Of course it's entirely counterproductive, it hardens people in their position of wanting to remain British.

"Argentina says this is part of Argentina, does it look to you like part of Argentina? Does it look to you like some Argentine minister said that it is a population held hostage by the military? I don't think so."

However, there are important issues that need to be hammered out with the islands' closest neighbour.

"There's simply no point in having a discussion on sovereignty, but there is one in having a discussion on other key issues. For a while we had that on shipping, air links, fisheries, hydrocarbon exploration, but Argentina stepped back from them."

Despite the islands' growing wealth, thanks to fishing and now the possibility for oil, Haywood said there were no calls as yet for independence.

And while he did not rule out organising a referendum so islanders could vote on which nation they belong to, Haywood said it was unnecessary.

"If the UN wants us to hold a referendum and that would resolve the matter of the Falklands islands once and for all, yeah, I would be up for that, because the outcome will be clear," he said.

"Three thousand islanders here in their right to self-determination want to remain a British overseas territory. That's it, it's the end of the discussion."