Forbes: Venezuela in Talks to Buy Shell Operations: “Venezuela's state-run oil company is in talks to buy the Argentine operations of Royal Dutch/Shell, Venezuelan President Hugo Chavez said Tuesday” (ShellNews.net) 2 Feb 05

Associated Press

Venezuela's state-run oil company is in talks to buy the Argentine operations of Royal Dutch/Shell, Venezuelan President Hugo Chavez said Tuesday.

Chavez, speaking with reporters during a visit to Buenos Aires, described the negotiations between Petroleos de Venezuela S.A., or PDVSA, and Shell as "advanced," calling them part of PDVSA's interest in expanding its Latin American operations.

Shell officials in Argentina refused to comment.

Royal Dutch/Shell currently operates about 600 gas stations in Argentina. Any potential deal would include those assets, along with the company's refining, lubricant and transportation operations, Chavez said.

Facing slagging profits in the region, Shell has recently sold off some of its Latin American operations, including its fuels marketing businesses in Peru and Venezuela.

Analysts have said heavy taxes on oil and fuel have cut into the company's profit margins in Argentina.

However, government price controls could complicate any potential sale.

Shell and other refiners have racked up large debts with oil producers operating in Argentina because of a pact aimed at keeping domestic fuel prices low.

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