Shell Argentina Denies Pollution Charges
Date: 10-Sep-07
Country: ARGENTINA
Author: Lucas Bergman
The closure marked an escalation of tensions between Royal
Dutch Shell and the center-left government of
President Nestor Kirchner. The two sides have repeatedly
clashed over energy pricing and supplies.
"None of our soil samples indicated that our contamination
levels are above acceptable levels for industrial areas," Shell
Argentina President Juan Jose Aranguren told reporters.
He said the company will call on the government to
reconsider its decision to close the refinery on the outskirts
of Buenos Aires, where Shell refines nearly 100,000 barrels of
of crude oil a day, mostly destined for the domestic market.
The closure opened a new chapter of confrontation between
Shell and Kirchner, who two years ago exhorted Argentines to
avoid buying "not even a can of oil" from the company after it
raised prices.
A tacit agreement between oil companies and the government
reached during Argentina's 2001-02 crisis has kept gasoline and
diesel prices below international values. Worried about
inflation, the government has resisted energy company calls for
price increases.
In a move that angered Shell officials, the government hit
the company with some US$1.6 million in fines against its local
executives recently, claiming the company failed to keep up
supplies in the domestic market.
Shell's refinery facility represents 15 percent of refining
capacity in the country and provides nearly 20 percent of
domestic gasoline supplies.
The company has not been able to export any products since
June because the government has denied its exportation
requests, Aranguren said.
Kirchner has sought to keep inflation in check as the
economy has grown more than 8 percent a year since 2002 by
striking price accords with business leaders.
Aranguren said the company's own monitoring of water and
soil samples showed its pollution within legal limits.
Because of the closure, he said the firm was advising
service stations in the country it cannot supply gasoline or
diesel, citing "force majeure."
Shell officials were planning to meet with government
officials on Thursday and Friday and are seeking an agreement
to relax the closure, he said.
Aranguren said it was too early to calculate the financial
cost of having the refinery shut but insisted the company
planned to continue operating in the country.
In April, Royal Dutch Shell ceded control Sakhalin-2 -- the
world's largest liquefied natural gas project -- after Russia's
environment watchdog charged it with ecological violations,
including deforestation and pipeline leaks.
Aranguren has publicly claimed Shell Argentina is being
targeted by government officials.
Last year, the government moved to prevent Shell from
selling a premium diesel fuel above market prices.
Days after the company unveiled the new fuel, the
government published a retroactive decree forcing energy
companies to obtain permission before launching new products,
which effectively forced the company to halt sales.
(Additional reporting by Hilary Burke and Cesar Illiano)
