BUENOS AIRES Aug 10, 2006 (Dow Jones Newswires)
U.S. oil major Chevron Corp. (CVX) plans to increase investment in Argentina in 2007, a company executive said Thursday during a presentation that sharply criticized government planners.
"We are going to invest $300 million in 2007, a more than 20% increase in comparison with 2006," Chevron's top Latin America upstream operations executive, Ali Moshiri, said at a Council of the Americas conference.
"While we are increasing our investment, we are selling our product at a significant discount and, really, our return on investment is substandard," he added.
Moshiri began his presentation by crediting the administration of President Nestor Kirchner for pulling the nation out of its 2001-02 financial meltdown.
"However, crisis management is different than establishing the appropriate long-term business framework needed to attract investment and sustain economic growth," Moshiri said.
Energy executives frequently complain against government interventionist measures, including a sliding export tax that was set at 45% of the value of a barrel of oil once the price passed $45/bbl, and frozen natural gas prices for residential users.
Moshiri suggested that the Argentine government return to an unregulated environment, signal that it will honor contracts, provide tax credits or other incentives, and establish an energy policy that restrains nonproductive consumption.
Prior to Moshiri's presentation, Argentina's Cabinet chief, Alberto Fernandez, and Planning Minister Julio De Vido defended the Kirchner administration's mixed economic model.
"This government doesn't break the rules of the game - it makes the rules where before there weren't rules," Fernandez said during his presentation.
Copyright (c) 2006 Dow Jones & Company, Inc.
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