MercoPress. South Atlantic News Agency

Shell will remain in Argentina and Chile.

Anglo-Dutch oil giant Shell denied plans to sell its energy related assets in Argentina to Petroleos de Venezuela (PDVSA). In his latest visit to Argentina, Venezuelan president Hugo Chavez announced his country was interested in taking over Shell's assets in Argentina.

"The possibility of leaving was originally considered but 15/20 days ago we reached the firm conclusion that the company will remain in Argentina: we're not leaving", said Shell Argentina CEO Juan Jose Aranguren in an interview published by Buenos Aires daily Clarin.

Last week President Chavez announced in Buenos Aires that negotiations with Shell were at an "advanced" stage because the Anglo-Dutch energy giant wanted to pull out of the Argentine market, while PDVSA planned an expansion in the South American nation. "I've never known about these negotiations. And if they'd taken place, I should have known" insisted Mr. Aranguren.

Shell actually sold assets in Venezuela and Peru last year but the corporation decided to keep its operations in Brazil and Central America and was in the process of deciding what to do with subsidiaries in Argentina and Chile, added Mr. Aranguren.

However the final decision was that: "Shell will remain in Argentina and in Chile". CEO Aranguren admitted that Shell Argentina lost "a lot of money" in 2002 and 2003 in the wake of the economic crisis that started in late 2001, but the situation began to turn around last year.

Apparently the Venezuela state owned oil company and Latinamerica leading corporation was interested in acquiring Shell Argentina following its business strategy of expanding in Latin America and cutting back in Europe.

Actually PDVSA last year opened corporate offices in Buenos Aires and decided on an alliance with Argentina's recently created and government-owned energy company, Energia Argentina (ENARSA). The agreement with ENARSA covers exploration, production and marketing of crude oil and sub-products. The first PDVSA gasoline service station, (one in 600 planned) was also inaugurated a few weeks ago in downtown Buenos Aires.

Venezuelan President Chavez is looking into the creation of Latinamerican transnational energy corporation, under the name of Petrosur, which will also include Brazil's Petrobras