Reuters AlertNet Lite - Shell refinery in Argentina could reopen -official

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Shell refinery in Argentina could reopen -official

08 Sep 2007 23:29:30 GMT
Source: Reuters

BUENOS AIRES, Sept 8 (Reuters) - The Argentine government could allow Royal Dutch Shell's sole refinery in Latin America to reopen next week if it approves a clean-up plan the company is expected to present in the coming days, a government official said on Saturday.

The government ordered the closure of Shell's Dock Sud refinery, which refines 100,000 barrels per day and is a key provider of diesel fuel in Argentina, on Wednesday, saying it was an environmental hazard.

The Environment Secretariat said in a statement that government officials on Monday "will meet with Shell representatives who are expected to present a clean-up plan of all the contaminated areas."

A government official told Reuters that it was likely the refinery, located in the outskirts of Buenos Aires, could start operating as early as Tuesday.

The government says it detected leaks, contamination in soil samples and other violations at the facility.

The closure deepened a long-running dispute between Shell <RDSa.L> and the government of President Nestor Kirchner, which has clashed with the oil major over energy prices and supplies.

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 2001-2002 economic crisis.

In recent months, some companies have attempted to raise prices, only to reverse the decision after being publicly criticized by the government.

Kirchner has sought to keep a lid on inflation, a top government priority, as Argentina's economy has rebounded, growing a sizzling 8 percent or more in the last four years.

In 2005, the Argentine leader exhorted Argentines to boycott Shell's products after it raised prices.

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Last updated:Sat Sep 8 23:29:39 2007