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C O N F I D E N T I A L BUENOS AIRES 000403 
 
SIPDIS 
 
SIPDIS 
 
DEPT. FOR P HEIDE BRONKE 

WHA FOR TOM SHANNON,BSC AND EPSC 

NSC FOR JOSE CARDENAS AND JUAN ZARATE 

USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 

USDOC FOR 3134/USFCS/OIO/WH/MKESHISHIAN 

USDOC FOR 4320/ITA/MAC/WH/DAS/WMBASTIAN 

 

E.O. 12958: DECL: 03/01/2017 

TAGS: PREL EINV ENRG ETRD EPET PGOV BL VE AR

SUBJECT: U/S BURNS IN ARGENTINA: DISCUSSES U.S. INVESTMENT 

INTERESTS, BIOFUELS, BOLIVIA AND VENEZUELA WITH PLANNING 

MINISTER DE VIDO 

 

 

Classified By: Ambassador E. Anthony Wayne for reasons 1.4(b)and(d) 

 

¶1. (C) Summary.  U/S Burns and A/S Shannon, accompanied by 

Ambassador, met February 9 with Minister of Planning and 

Infrastructure Julio De Vido and discussed the public 

controversy over Embassy support for a proposed U.S. 

company's investment, broader investment concerns, and 

respective plicies toward Venezuela.  U/S Burns noted 

concerns of some U.S. companies regarding Argentina,s 

uncertain regulatory environment and our unpleasant surprise 

at President Kirchner's public response to press stories 

regarding a commercial advocacy case for U.S. investment firm 

Eton Park.  De Vido noted the good mechanism for 

communication he enjoyed with the Embassy and blamed the 

incident on the local press.  U/S Burns raised concerns about 

Hugo Chavez, negative influence in South America and 

discussed the USG,s desire to work with Argentina, Brazil 

and other democratic countries in the  region to promote 

stability and democracy in Bolivia.  De Vido detailed 

Argentina's plans for economic ties with Caracas.  U/S Burns 

also extended an invitation to De Vido to visit Washington. 

End Summary. 

 

¶2. (U) U.S. Participants: 

Under Secretary for Political Affairs Nicholas Burns 

Assistant Secretary for Western Hemisphere Affairs Thomas 

Shannon 

Ambassador E. Anthony Wayne 

William McIlhenny, Member, Policy Planning Council (S/P) 

Heide Bronke, P Special Assistant 

David Alarid, Acting Political Counselor 

Juan Avecilla, Notetaker 

 

Argentine Participants: 

Minister for Planning and Infrastructure Julio De Vido 

Ministry General Coordinator Claudio Uberti 

 

 

U.S. INVESTMENT PROSPECTS IN ARGENTINA 

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

 

¶3. (SBU) U/S Burns and A/S Shannon, accompanied by the 

Ambassador, met with Argentine Minister of Planning and 

Infrastructure Julio M. De Vido on February 9.  The Minister 

began by highlighting U.S. investment in Argentina and noted 

that several U.S. companies had signed recent deals and were 

investing in Argentina,s energy sector, including that of a 

USD 50 million agreement between ENARSA (Energia Argentina 

Sociedad Anonima) and GX Technologies for offshore oil 

exploration.  The Minister also said that several U.S. energy 

companies are seeking business opportunities throughout 

Argentina, including Apache, AES in Santa Fe Province, Duke 

Energy in Rio Negro Province, and GE in Chubut Province. 

 

""THE LETTER"" 

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

 

¶4. (C) The Under Secretary and Ambassador expressed their 

disappointment over the public manner with which GOA dealt 

with the Argentine media,s publication of a commercial 

advocacy letter the Embassy had sent the Minister the prior 

week on behalf of U.S investment fund Eton Park,s interest 

in buying a share of Argentine power distribution company 

(Transener) from Brazil's Petrobras.  The U/S said that the 

Ambassador was doing his job of advocating on behalf of an 

American business and was surprised by President Kirchner,s 

negative criticism about being pressured by a foreign 

country.  The Under Secretary stressed that such open 

criticism of foreign investment could affect American 

businesses, opinion about Argentina,s business climate. 

De Vido said that he did not need to explain his President,s 

comments, but noted that his office enjoyed good relations 

with the Embassy and that the Embassy and the Ministry had a 

good mechanism for quietly resolving such issues. De Vido 

said he had considered the letter as coming from a friend and 

 

 

not as pressure, but he had shredded it given the tendency of 

things to leak to the press in Argentina.  He said the GOA 

regulatory body had issued a negative opinion on the proposed 

Eton Park investment on February 7, which may have sparked 

the press story.  He said he hoped the incident would not 

interrupt the good working relationship with the Ambassador 

and that he looked forward to continuing roundtables with the 

Ambassador and U.S. businesses, similar to the one the 

Ambassador recently hosted with aviation companies.  Both 

parties agreed to put the matter to rest and to consider it a 

""misunderstanding."" 

 

BIOFUELS AND A PIPELINE 

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

 

¶5. (SBU) The Minister said that Argentina is searching for 

alternative energy and hopes that five percent of 

Argentina,s fuel will come from biofuels by 2010.  According 

to the Minister, they plan to construct 40-50 small biofuel 

distillers throughout the country, each to group four or five 

smaller farmers.  He acknowledged that Argentina,s biofuel 

development was not as advanced as that of Brazil or the U.S. 

 U/S Burns explained the basis of the biofuel initiative with 

Brazil, with its focus on research and development and the 

aim of stimulating regional markets in North, Central and 

South America, and the Caribbean.  The U/S noted that the 

intention was to start with Central America and the 

Caribbean, but that the U.S. had joined Brazil,s 

international forum to take the concept global and create 

worldwide demand and markets.  The U/S explained  that the 

United States had promising new biofuel  technologies with 

""enormous promise"" and hoped that private  investment could 

help Argentina and other countries, beyond  Brazil, improve 

their ethanol-based industries. 

 

BOLIVIA AND VENEZUELA 

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

 

¶6. (C) The discussion turned to Bolivia and Venezuela with 

the U/S noting our desire for good relations and open 

channels of communication with President Morales.  He said, 

however, that relations with Venezuela were completely 

different.  U/S Burns said that the U.S. was willing to 

engage with Venezuela, but that Chavez was not interested in 

talking to the U.S.  A/S Shannon explained that the USG was 

interested in a positive and constructive relationship, 

focused on concrete issues, such as counter terrorism, 

counter narcotics, and trade and energy issues, with both 

President Chavez and Bolivian President Morales.  A/S Shannon 

noted that we have tried reaching out to Venezuela but have 

been rebuffed on several occasions.  The  Under Secretary 

noted that he viewed Brazil and Argentina as  ""guarantors of 

stability"" in the region, but warned that  Venezuela,s 

growing influence was more of a ""danger here  (South America) 

than in the United States."" 

 

¶7. (SBU) De Vido explained that the GOA had good relations 

with Chavez based on economic and commercial issues.  He 

described the 2004 ""fiduciary exchange"" agreement the 

countries signed in which Argentina would buy winter fuel 

oil and Venezuela would, in turn, use these revenues to buy 

Argentine agriculture products, tractors, healthcare 

supplies, and other industrial products. This agreement had 

grown from USD 200-300 million in 2004, to USD 800 in 2006. 

He also described the joint exploration deal between 

ENARSA/PDVSA in the Ayacucho area of the Orinoco Basin.  He 

said this was the largest of Argentina,s ventures with 

Venezuela, noting that the potential yield from the venture 

could equal Argentina,s known petroleum reserves.  De Vido 

said that they were looking to partner with private companies 

as well.  Finally the Minister also described plans (with a 

laser pointer on the map) to build an oil pipeline linking 

Venezuela with Brazil, Argentina and Bolivia by 2015.  The 

Minister noted several pending gas pipeline issues with 

Bolivia. 

 

 

 

¶8. (C) De Vido noted that these were very ""particular"" times 

politically in Venezuela.  He said, ""We would not say that 

Venezuela was not a democracy, although it is not like the 

U.S., Argentina or Brazil.  Each democracy is different."" 

He further opined that he understood U.S. concerns with 

Venezuela and that the GOA too had been surprised by his 

radical rhetoric, but that he did not see Chavez as a danger, 

that he was mostly talk, but that he needed to be contained. 

Bringing Chavez into MERCOSUR, De Vido said, was just such an 

effort.  He noted the growing common interests between Brazil 

and Argentina -- much like the U.S. and Canada and the U.S. 

and Mexico -- but asserted that a three-way dialogue was 

necessary.  The Minister suggested that a tripartite dialogue 

between Argentina, Brazil and the U.S. was the best bet for 

guaranteeing regional stability.  He urged the U/S and A/S to 

consider organizing such a three-way discussion. 

 

¶9. (U) The Under Secretary closed the meeting by inviting the 

Minister to visit the United States in the near future, 

perhaps when he traveled to Atlanta to participate in 

Secretary Gutierrez' competitiveness forum. 

 

SIPDIS 

WAYNE 


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