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The war of Argentina on foreign multinationals

The WIKILEAKS Public Library of US Diplomacy (PlusD) holds the world's largest searchable collection of United States confidential, or formerly confidential, diplomatic communications. As of April 8, 2013 it holds 2 million records comprising approximately 1 billion words. The collection covers US involvements in, and diplomatic or intelligence reporting on, every country on earth. It is the single most significant body of geopolitical material ever published. The PlusD collection, built and curated by WikiLeaks, is updated from a variety of sources, including leaks, documents released under the Freedom of Information Act (FOIA) and documents released by the US State Department systematic declassification review.


A cable from September 2007, reveals some US serious concerns about the fact that Exxon-Mobil and other multinationals were indirectly forced to abandon Argentina under Nestor Kirchner administration.

The letter is particularly revealing because it also shows that Argentina was trying to oust foreign big interests and put the energy sector under state and domestic private control. It also shows that the Leftist governments in Latin America at the time were trying to cooperate in the energy sector by using the state-controlled big companies at the expense of foreign multinationals and, apparently, for the benefit of their people.

Key parts:

Energy sector players in Argentina observe that the Kirchner administration has made a strategic decision to promote expanded direct state and private Argentine participation at the expense of foreign multinationals. To "encourage" foreign multinationals to cede control of energy assets, they say, the GoA [Government of Argentina] has used its formidable regulatory oversight powers and heavy-handed market interventions to limit these companies' freedom of action and profitability. Over the past two years alone, energy majors CMS, Total and Electricite de France have departed the Argentine market, selling their assets cheaply to local interests.

Local energy analysts are watching developments closely and will take any low-balling of Exxon's asset value as a sign of overt GoA interference. Many question the wisdom of allowing local players with no experience in the highly technical refining sector to take over one of Argentina's most important refineries. One possible outcome could be a purchase of Exxon assets by recently created state-owned energy company ENARSA. Given ENARSA's burgeoning cooperation with its Venezuelan counterpart PDVSA, another scenario could involve the Chavez administration seeking to purchase Exxon's assets in a joint venture with ENARSA as a means to gain a quick and strong retail presence in the Argentine market. Recetly, considerable media attention has focused on Brazil's Petrobras as an interested bidder on Exxon assets. Since Petrobras already has a refining presence in Argentina, GoA anti-trust approval could be a possible barrier to such a bid.

Exxon's 96-year presence in Argentina has made its local "Esso" brand emblematic of this nation's highly developed automobile culture. Rumors that Exxon is shopping its Argentine assets, after having braved almost century's worth of Argentina's extreme economic volatility, have raised many eyebrows. Beatrice Nofal, head of the GoA's investment promotion entity, Prosper-AR, privately acknowledged a possible Exxon departure as "an Argentine investment climate public relations nightmare." A near-term Exxon departure from Argentina would be widely viewed as a no-confidence vote in the economic policies of a likely incoming Christina Fernandez de Kirchner administration.

Since 2004 the GoA has variably curtailed natural gas exports to Chile, a direct consequence of a GoA domestic energy pricing policy that makes domestic natural gas consumption considerably cheaper than alternative liquid fuels. Exxon notes that such unilateral GoA export restrictions have created conflicts with Exxon's Chilean customers, put Exxon in legal jeopardy, and damaged the company's reputation as a reliable supplier.

Full cable:



As has been mentioned, ten years ago, most of Latin America was governed by Center-Left progressive or even Leftist governments. For example, Cristina Fernandez in Argentina, Evo Morales in Bolivia, Rafael Correa in Ecuador, Fernando Lugo in Paraguay, Daniel Ortega in Nicaragua, Manuel Zelaya in Honduras, and Lula da Silva in Brazil, just as an example. And Hugo Chavez, of course, in Venezuela. Since then, the so-called 'pink tide' has receded quite dramatically.

Of these 10 governments that were Left of Center, only four remain. Nicolas Maduro in Venezuela, Morales in Bolivia, Vazquez in Uruguay, and Daniel Ortega in Nicaragua. What happened? Some would argue that the US played an important role in at least some of these changes.

This cable provides another evidence for the real reason behind US efforts to wipe out the Leftist governments in Latin America. It is certain that the big oil lobby is spending millions of dollars to buy politicians in the US and abroad, in order to rebound in Latin America with the help of right-wing puppet regimes.

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