money.cnn.com: Argentina Seeks Arrest For Shell Executives – Report

August 19, 2007: 11:30 AM EST

BUENOS AIRES (Dow Jones)-The Argentine government’s price controllers are seeking arrest warrants for top executives at the local unit of Royal Dutch Shell PLC (RDSB.LN), apparently on the grounds that the company has failed to adequately supply the local fuels market, Argentine daily La Nacion reported Sunday.

Government and company officials weren’t immediately available for comment amid the long weekend. Monday is a national holiday.

The apparent request, made to a judge by the government’s price control point man, Commerce Secretary Guillermo Moreno, comes after a string of government measures against Shell that began in March 2005, when President Nestor Kirchner called on Argentines to boycott Shell stations for lifting prices, a move followed by the local unit of Exxon Mobil Corp. (XOM).

Shell and Exxon cited skyrocketing global oil prices for the pump price increases. Following Kirchner’s call to action, however, protesters marched on several Shell stations in Buenos Aires. As sales dropped off, Shell and Esso quickly reversed the price hikes. Pump prices have remained more or less under de facto government control since.

In September of last year, the government forced Shell to pull a new, more expensive premium diesel from stations by publishing a retroactive decree that required prior government approval for all new fuels. Moreno’s office also sent investigators to review Shell’s administrative records.

A month later, the government activated a 1974 “supply law” that allows for fines and imprisonment of executives from companies that fail to supply goods, in that case diesel fuel, which was running short as farmers moved to plant soy.

Since then, the government has fined Shell twice for allegedly failing to supply the market. Moreno is apparently seeking an arrest warrant under the supply law’s provisions, La Nacion reported.

Meanwhile, the head of Shell’s local operations, Juan Jose Aranguren, has broken ranks with other fuel retailers, steadily criticizing the government. Additionally, the company hasn’t participated in a recent meeting called by Moreno to discuss prices.

-By Drew Benson, Dow Jones Newswires; 54911-4417-2884; andrew.benson@ dowjones.com

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  08-19-07 1130ET
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