Identifier
Created
Classification
Origin
09BUENOSAIRES87
2009-01-27 09:42:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Buenos Aires
Cable title:  

Argentina: Pan American Energy on Bolivian Nationalization

Tags:  ECON EPET ETRD EINV AR BL 
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PP RUEHWEB

DE RUEHBU #0087 0270942
ZNR UUUUU ZZH
P 270942Z JAN 09
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC PRIORITY 2927
RUEHLP/AMEMBASSY LA PAZ JAN 5254
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUEHPE/AMEMBASSY LIMA 2389
RUCNMER/MERCOSUR COLLECTIVE
UNCLAS BUENOS AIRES 000087 

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ECON EPET ETRD EINV AR BL
SUBJECT: Argentina: Pan American Energy on Bolivian Nationalization
of Empresa Petrolera Chaco

This cable contains sensitive information - not for internet
distribution.

UNCLAS BUENOS AIRES 000087

SIPDIS
SENSITIVE

E.O. 12958: N/A
TAGS: ECON EPET ETRD EINV AR BL
SUBJECT: Argentina: Pan American Energy on Bolivian Nationalization
of Empresa Petrolera Chaco

This cable contains sensitive information - not for internet
distribution.


1. (SBU) Dennis Keleher, CFO of Pan American Energy, called
Ambassador January 26 to inform him that no/no U.S. citizens were
involved in the January 23 Bolivian government take-over of Empresa
Petrolera Chaco SA (Chaco). He said only one UK national had been
present at the takeover, that all other expatriate employees are
safe and at their residences in Bolivia, and that Chaco is currently
being run by YPF Bolivia employees.


2. (SBU) Keleher said that Bolivian soldiers and officials showed up
at Chaco's offices and gas fields last week and that employees were
made to sign over the remaining ownership shares to the Government
of Bolivia. Pan American/Chaco, he said, had been negotiating with
the GoB to ensure preservation of asset value as ownership was
transferred. Pan American believes, he said, that YPF Bolivia does
not have the capacity to manage the gas fields and to run the
company without significant deterioration of performance, and it was
trying to negotiate a transition processes which would take that
into account. Keleher said that the earlier Bolivian government
decree nationalizing the company states that the shares are valued
at $29 each, but that it also indicates that tax and other
liabilities will be taken into account, i.e. any GoB payout will
likely be much lower. Keleher did not ask for Embassy assistance.

--------------
PAE Ownership
--------------


3. (SBU) Pan American Energy (PAE) was incorporated 1997 in Delaware
as a strategic alliance between Amoco (now BP America) and
Argentina's Bulgheroni family-owned Bridas, incorporating all Bridas
oil and gas properties in the Southern Cone. BP America holds a 60%
and Bridas a 40% interest in the company. In 2001, BP America and
Bridas added their 50% stake in Bolivia's exploration and production
company Empresa Petrolera Chaco SA to PAE holdings. Under its joint
venture agreement, BP America appoints the PAE CEO and CFO while
Bridas appoints the COO.


4. (SBU) PAE's partial local ownership and its aggressive expansion
of Argentine oil and gas exploration and production in an era where
overall Argentine hydrocarbon production has trended steadily
downward has made this company a favorite of the Kirchner
administration. The U.S. Department of Commerce Advocacy Center has
previously declined to take up advocacy on behalf of PAE as a U.S.
entity, but BP owns its majority stake in PAE through its U.S. BP
subsidiary.

WAYNE