Reuters AlertNet Lite - Argentina shuts Shell refinery, citing pollution

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Argentina shuts Shell refinery, citing pollution

06 Sep 2007 01:13:09 GMT
Source: Reuters

BUENOS AIRES, Sept 5 (Reuters) - Argentina's government on Wednesday ordered the closure of a refinery belonging to Royal Dutch Shell Plc <RDSa.L>, citing concerns over pollution.

The move comes amid increasing tensions between the company and the government of President Nestor Kirchner, which has clashed with the oil major over energy prices and supplies.

The facility, the Anglo-Dutch oil company's sole refinery in the country, was ordered shut after government officials detected leaks, contamination in soil samples and other infractions, the Environment Secretariat said in a statement.

The facility will remain closed until "the company ends the dangerous situation for the environment," the statement said.

Shell officials did not immediately comment.

The decision marks the latest in a string of confrontations between the local unit of Shell and Kirchner that began in 2005 when the center-left leader called on Argentines to boycott the company's products after it raised prices.

Battling inflation has been the government's top economic priority. Argentine consumer prices last year rose 10 percent.

Gasoline and diesel prices have been virtually frozen in Argentina for more than four years due to a tacit agreement between oil companies and the government reached during Argentina's 2001-02 economic crisis.

Heightening tensions, the government recently levied some $1.6 million in fines against local Shell executives, claiming the company failed to keep up supplies in the domestic market.

The decision led Shell Argentina President Juan Jose Aranguren to publicly claim the company was being singled out as a target by government officials.

Last year, the government moved to prevent Shell from selling a new diesel fuel above market prices.

Days after the company unveiled the new fuel, the government published a retroactive decree forcing energy companies to obtain permission before launching new products, which effectively forced the company to halt sales.

(Reporting by Damian Wroclavsky)

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Last updated:Thu Sep 6 01:15:15 2007