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Reuters: Argentina to slap lien on Shell refinery – source

Fri Jan 18, 2008 8:49am EST 

BUENOS AIRES, Jan 18 (Reuters) – Argentina will slap a lien on a Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research) refinery after the firm failed to pay $20.7 million in fines for violating the country’s fuel supply laws, a government source said Friday.

The measure against Shell’s only refinery in South America, which refines nearly 100,000 barrels per day and is a key provider of diesel fuel in Argentina, will be “taken in the coming days,” the source said on condition of anonymity.

Shell officials were not immediately available for comment.

The move opens a new chapter in a long-running dispute between Shell and the government, which has repeatedly clashed with the oil major over its attempts to regulate energy prices and supplies. It also comes days after Shell resisted the latest government effort to lower prices.

Earlier this month, the government briefly halted exports of diesel and gasoline to guarantee domestic supplies.

Exports were later reopened for most oil companies after they agreed to bring prices down at service stations. Shell was not included in the group, according to the government, because it refused to change its 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 prices. Worried about inflation, the government has refused energy company calls for significant price increases.

In 2005, former President Nestor Kirchner urged Argentines to avoid buying “even a can of oil” from Shell after it raised prices. The company later dropped the price hike.

Last year, the government also fined the company’s local executives, saying Shell had failed to maintain supplies in the local market.

It also briefly closed Shell’s Dock Sur refinery, located in the outskirts of Buenos Aires, last year on environmental grounds.

Other oil majors operating in Argentina include Spain’s Repsol (REP.MC: Quote, Profile, Research), Brazil’s state-controlled Petrobras (PETR4.SA: Quote, Profile, Research) and Esso, an affiliate of Exxon Mobil Corp (XOM.N: Quote, Profile, Research). (Reporting by Damian Wroclavsky; Writing by Kevin Gray; Editing by John Picinich)

© Reuters 2008 All rights reserved

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