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THE WALL STREET JOURNAL: Argentina, Venezuela To Talk Energy During Chavez Visit: “…talk has periodically surfaced that PdVSA has its eye on refining operations and some 900 service stations here run by Royal/Dutch Shell Group (RD). Both companies have denied the buyout talk, which resurfaced this week” (ShellNews.net) Posted 1 Feb 05

 

DOW JONES NEWSWIRES

 

BUENOS AIRES -- Argentine President Nestor Kirchner and visiting Venezuelan President Hugo Chavez are expected to sign a handful of mostly symbolic energy agreements Tuesday, a government spokesman said.

 

Among events planned for Chavez's two-day visit is the inauguration of two gasoline stations in Buenos Aires under a joint venture between state-run Petroleos de Venezuela S.A. (PVZ.YY), or PdVSA, and Argentina's fledgling government energy company, Enarsa.

 

The Energy Secretariat representative added that "several" agreements will also be signed.

 

The head of PdVSA said in July that the state-run company was interested in setting up service stations in Argentina, but that any plans of establishing a footprint here under its Citgo logo were scrapped in the wake of Argentina's 2001-2002 financial crisis.

 

Since then, talk has periodically surfaced that PdVSA has its eye on refining operations and some 900 service stations here run by Royal/Dutch Shell Group (RD). Both companies have denied the buyout talk, which resurfaced this week.

 

PdVSA, which inaugurated an office in Buenos Aires in October, has established its presence in various countries under its Citgo and PDV banners.

 

PDV operates service stations in Guatemala and Brazil among others, while Citgo has some 13,500 stations in the U.S. alone.

 

Kirchner and Chavez are also expected to extend food-for-fuel agreements in which Argentina sends agricultural goods, including grains and cattle, to Venezuela in exchange for diesel and gasoil.

 

Last April, Argentina signed a $240 million deal with Venezuela to import around 1 million tons of fuel in exchange for cash and agricultural goods.

 

The fuel imports helped Argentina overcome an energy crunch at the onset of last year's South American winter.

 

The country faces a repeat of the crisis this year as seasonally high demand is expected to again threaten an energy sector that has seen little reinvestment since the state froze utility rates in January 2001.

 

-By Drew Benson, Dow Jones Newswires; 5411-4311-3127; andrew.benson@dowjones.com


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