1. As part of ongoing Embassy efforts to advocate on behalf of U.S.
companies in Argentina, the Ambassador asked Planning Minister De
Vido to participate in investor roundtables for U.S. electricity/gas
and civil aviation sector players. Ambassador also noted (1) Turner
Broadcasting's recent $235 million purchase of Argentina's Claxon
broadcasting, a move that will see Argentine channels and locally
produced media content marketed internationally by Turner; (2) CS
Solutions' request for the GoA to acquire offshore oil and gas
exploration blocs; (3) concerns expressed by U.S. investment fund
Eton Park over ongoing delays in regulatory approval for its
purchase of a 26% stake in regulated electricity transmission
company Transener; and (4) U.S. hydrocarbon exploration major Apache
Energy's concern that the GoA's recent revocation of export tax
exemptions for oil and gas exports from Tierra del Fuego province
had substantially lowered the value of its recent $800 million-plus
investment in the region. As a senior advisor and confidant to
President Kirchner, Minister De Vido has proven a key GoA
interlocutor to address U.S. investor concerns. END SUMMARY



2. In a January 15 meeting with Minister De Vido which focused on
Argentina's priorities at the upcoming Rio Mercosur Summit (Ref A),
the Ambassador also highlighted recent and planned new U.S.
investment in Argentina and raised concerns expressed by some energy
sector players.



--------------------------


U.S. Investor Roundtables


--------------------------





3. (SBU) Following up on Minister De Vido's earlier suggestion that
he and the Ambassador co-host sector-specific roundtables with U.S.
investors to address their concerns, Ambassador noted that company
officials of U.S. electricity and gas sector (AES, CMS, Duke, Eton
Park, E-On/LG&E), as well as civil aviation sector (American,
Continental, Delta. Fed-Ex, United, UPS) investors were eager to
take De Vido up on his offer. Ambassador hoped to arrange a first
civil aviation sector roundtable this month, before parliament
considers a controversial law that, in part, deals with the cost and
quality of services provided to U.S. air carriers by Argentina's
privatized airport concession owner. De Vido agreed to arrange a
date for this meeting as soon as possible.



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Turner Broadcasting Expands Argentine Investment


--------------------------

---



4. (U) The Ambassador noted that Turner Broadcasting, a Time Warner
Company, has recently acquired (pending GoA regulatory approval)
Claxon, a major Argentina-based competitor in Latin America, for U$S
235 million. This is in addition to Turner Broadcasting's ongoing
investments in Argentina, including its purchase last year of a
large building in San Telmo where it transmits its channels to all
Latin America (CNN, CNN en Espanol, TNT, TCM). The Ambassador
called this a good case for President Kirchner to highlight since
this acquisition will permit a U.S. company to market Argentine





creative products and services (local channels and locally produced
content) to the world. He also noted that President and COO of Time
Warner, Jeffrey Bewkes, will visit Buenos Aires at the end of the
month and seek high level meetings.



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CS Solutions Seeks Offshore Drilling Approval


--------------------------

-



5. (SBU) The Ambassador noted that U.S. drilling player CS Solutions
is seeking approval from state energy company ENARSA for its bid to
acquire shallow offshore oil and gas exploration blocs. De Vido was
aware of CS' bid, said that his energy Secretariat welcomed CS entry
into the Argentine hydrocarbon exploration market, and that ENARSA
approval should be forthcoming within a few weeks.



--------------------------

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Eton Park: Electricity Trans Investment Approval


--------------------------

---



6. (SBU) The Ambassador noted concerns expressed by major U.S.
investment funds Eton Park over ongoing delays in regulatory
approval for its purchase of a 26% stake in regulated electricity
transmission company Transener from Petrobras (Ref C). Final GoA
approval of Eton Park's investment in Transener, the Ambassador
said, would be seen as a positive signal by the GoA to the
institutional investment community in the United States at a time
when Argentina is striving to welcome foreign direct investment,
particularly in strategic sectors related to infrastructure and
energy. De Vido said he understood that Petrobras was still in the
process of accepting bids from potential buyers. (Note: According to
Eton Park, this is not the case - the Eton Park bid and 20% down
payment was accepted by Petrobras months ago. Ambassador will send
a clarifying letter to Minister De Vido seeking expedited regulatory
approval



--------------------------


Apache Energy Seeks Compensation


--------------------------





7. (SBU) Finally, the Ambassador noted U.S. hydrocarbon exploration
major Apache Energy's concern that the GoA's recent decision to
exclude export tax exemptions for oil and gas exports from Tierra
del Fuego province's broad tax concession program had substantially
lowered the value of its recent $800 million-plus investment in the
region. De Vido cast this GoA action as a fait accompli with little
the GoA could do to compensate Apache without offering similar
treatment to other international oil companies operating in the
region. He also expressed his strong support for Apache's presence
and performance in Argentina.



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Comment


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8. (SBU) In De Vido's role as Planning Minister, he is directly
responsible for Argentina's energy, telecommunications,
transportation, and mining sectors. As a senior advisor and
confidant to President Kirchner, he has proven himself an important
- perhaps the key - GoA interlocutor to address U.S. investor
concerns. Post will continue to advocate aggressively on behalf of
U.S. investors in Argentina many of whom, while largely profitable,
remain concerned by delays in regulatory approvals and sudden
changes in the GoA's regulatory and tax regimes.

WAYNE