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DE RUEHBU #0085/01 0181922
ZNR UUUUU ZZH
R 181922Z JAN 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 6997
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/USDOC WASHINGTON DC
RUEHRC/DEPT OF AGRICULTURE USD FAS WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUEHAC/AMEMBASSY ASUNCION 5863
RUEHMN/AMEMBASSY MONTEVIDEO 6086
RUEHSG/AMEMBASSY SANTIAGO 0079
RUEHBR/AMEMBASSY BRASILIA 5708
RUEHSG/AMEMBASSY SANTIAGO 0080
RUEHLP/AMEMBASSY LA PAZ JAN SAO PAULO 3104
RUEHRI/AMCONSUL RIO DE JANEIRO 2108

UNCLAS BUENOS AIRES 000085 
 
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WHA FOR WHA/BSC AND WHA/EPSC 
E FOR THOMAS PIERCE 
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USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 
US SOUTHCOM FOR POLAD 
 
E.O. 12958: N/A 
TAGS: EINV ECON ENRG EPET AR
SUBJECT: EMBASSY ADVOCACY WITH MINISTER DE VIDO ON BEHALF OF U.S. 
INVESTORS 
 
Ref:  (a) BsAs 70 
 
      (b) 06 BsAs 2808 
      (c) 06 BsAs 2598 
 
The following cable contains business sensitive information and 
should not be made available on the internet. 
 
 
------- 
Summary 
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¶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. 
 
--------------------------------------------- --- 
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. 
 
--------------------------------------------- 
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. 
 
--------------------------------------------- --- 
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