ChevronTexaco to Invest $150M in Argentina's Neuquen Area

ChevronTexaco will invest $150 million in Argentina's southern province of Neuquen during 2004, provincial officials confirmed Tuesday.

Neuquen Gov. Jorge Sobisch and his officials held talks Sunday with Ali Reza Moshiri, president of ChevronTexaco Latinamerica Exploracion y Produccion.

According to Neuquen's Under Secretary for Energy, Eduardo Carbajo, the executive told provincial officials Chevron will carry out promised exploration and operation investments in 2004 and would pump fresh money into the province in the following years.

"One hundred and fifty million dollars is the total for this year and there are other investments, which they will make in coming years," Carbajo said the executive told them.

Chevron didn't return a call seeking comment.

Carbajo said some of the investments were already foreseen after the company won three-year exploration contracts last year to run four oil and gas concessions in the province. Those investments would be in exploration and development.

However, the company said it would also spend money on the operation side in oil and gas during this year.

Oil and gas companies in Argentina are beginning to raise their investments again after holding back in the last couple of years because of the country's economic crisis and abrupt rule changes, including a two-year utility rate freeze and export taxes.

With gas demand rising 9% in December 2003 from a year earlier and the international oil price remaining at high levels, the economic incentives to invest have grown.

Neuquen is one of Argentina's leading energy producing regions. Gov. Sobisch has recently floated a proposal which would allow the province to lift the price of natural gas at the well, in a bid to encourage investment.

The government hasn't yet stated its position, but until now, President Nestor Kirchner has opposed allowing utility rate hikes until all 61 public service contracts are completed.