MercoPress. South Atlantic News Agency

Petrobras 2006/10 investment totals 56,4 billion US dollars

Brazil's government owned oil company Petrobras announced plans to invest 56,4 billion US dollars in the next five years, most of it in Argentina, Venezuela and in the US areas of the Gulf of Mexico.

Petrobras CEO Jose Sergio Gabrielli indicated that the original target had been established at 34,5 billion US dollars for the 2006/2010 period but it was increased 64% given the global energy situation "a significant increase was needed to cover the growing costs of the oil production chain because of the surge in international prices of crude".

"Our investments in South America are concentrated mainly in Argentina and Venezuela", said Mr. Gabrielli who considered "marginal" any further investments in Peru, Ecuador and Bolivia.

A recent bill approved by the Bolivian government more than doubling oil taxes has irritated oil and gas corporations with investments in the landlocked country that concentrates South America's main gas reserves behind Venezuela.

Petrobras in Argentina is involved in oil and gas exploration and production; refining; electricity; lubricants; fertilizers and gas and energy transport.

In Argentina, Petrobras 3,9 billion US dollars investment plan has been increased to 7,8 billion US dollars, mostly new projects not included in the original outlay.

According to an official Petrobras release, 87% of investments are concentrated in hydrocarbons exploration and production, of which 44% in Latinamerica; 19,6% in Africa and 20% in the Gulf of Mexico. Lavagna ratifies "weak peso" policy to promote exports Keeping the value of the peso relatively weak is essential if Argentina's exports are to continue growing, said Argentine Economy Minister Roberto Lavagna speaking at an event organized by the Argentine Exporters Chamber to celebrate Exports Day. "Conditions referring to exchange rates and the idea of a US dollar worth between 2.20 and 2.40 pesos have nothing to do with this economic model and is an unacceptable condition."

The retort was in reply to criticism that has arisen over the government's policy of keeping the value of the peso as low as possible. Financial sectors, conservative economists and the International Monetary Fund say that the government exchange policy is inflationary and that the peso should be allowed to float freely.

Lavagna added that if exports "grow at 10 to 12% a year over the next five years, Argentina will increase its sales abroad from 16.8 to 60 or 62 billion dollars."

At the moment, Lavagna added, something unique is taking place: "Argentina is growing at seven percent and posting a hefty trade surplus, something that has not occurred in the last 45 years."

"We need an exchange rate that guarantees the competitiveness of our exports and the growth of local jobs," he warned.

"Since 1987 ? Lavagna said ? Argentine exports have averaged some US27 billion a year, but in the last 12 months they have climbed to US36.8 billion, with an increase in volumes exported."

Mr. Lavagna also highlighted that given the current overall foreign debt situation, the debt/export ratio has dropped from 5,5 in 2001 to 3,5 following the restructuring and "should drop to a 2 ratio by 2010.

Enrique Mantilla, the head of the Exporters' Chamber, in turn pointed out that Argentina's exports have jumped 16 percent in the last 12 months.

According to Mantilla "there is a potential for Argentine exports to grow so that by 2010 sales abroad should total US70 billion." Argentina-Uruguay controversy over pulp mill plants The Argentine government pledged Tuesday to press its request to the Uruguayan government to halt construction of two pulp mills on the Uruguay River. The Argentine government wants the building of the plants to stop "until the results of ongoing environmental reports are known." The mills are being built on Fray Bentos, a town on the Uruguay river across from the Argentine city of Gualeguaychú, in the province of Entre Ríos.

Residents of Gualeguaychú, as well as Entre Ríos Governor Jorge Busti, met this week with President Néstor Kirchner at Government House. Foreign Minister Rafael Bielsa, Cabinet Chief Alberto Fernández and the Argentine Ambassador to Uruguay, Hernán Patiño Meyer, were also in the meeting.

"The Argentine Republic has already made a number of decisions regarding this matter and more will be made. We are not going to diminish our efforts to detain the construction of the mills until this (the environmental report) is verified," said Bielsa in a press conference after the meeting. He said it was "irritating" to see the construction of the mills continuing and called the issue "a national issue".

"We're absolutely satisfied because the same position against the pulp mills, which was upheld by President Kirchner during his meeting with Uruguayan president Tabare Vazquez, was expressed by the mayor of Gualeguaychú and the environmentalist organization", said Governor Jorge Busti.

The environmentalist group handed to President Kirchner a letter signed by 35,000 residents ratifying the NO to the pulp mill plants because of their dioxin contaminants.

Uruguayan authorities retorted that the pulp mills to be built have state of the art de-contamination equipment, similar to those in Finland, and that the 1,5 billion US dollar investment project "will go ahead".