APPENDIX 2
Memorandum submitted by the Argentine
Ambassador
INVESTMENTS
According to recent official data, in the first
seven months of 2006 the amount invested or to be invested in
Argentina reached US$ 13.6 billion, the same level as the whole
year of 2005. From 2004 to 2005 investments already had increased
in 30%.
According to UNCTAD's World Investment Report
2006, foreign direct investments inflows to Argentina increased
9% in 2005.
The Argentine Ministry of Economy is estimating
that gross domestic fixed investments as part of GDP will reach
21.5% in 2006.
INVESTMENTS IN
ENERGY
The following are some of the recent developments
related to energy investments in Argentina:
— Siemens AG, has been awarded
major contracts for the construction of two combined cycle power
generation unit. The total order is valued at US$ 1.6 billion.
Commercial operation is due to start in the first half of 2008.
— Investment in the development
of biodiesel has recorded a strong growth between January 2005
and August 2006, reaching US$ 285.5 million. On 19 April a Law
promoting the production of biofuels from grains and soybeans
was enacted by the Senate.
— Bolivia and Argentina signed,
on 29 June, a new gas agreement that will secure a large increase
in export volumes, when a new pipeline in northern Argentina will
be completed.
— Petrobras will invest US$ 420
million in Santa Cruz in order to explore and operate two gas
fields. The company has already invested in that province nearly
US$ 240 million in the last three years. Gas reserves in the area
could reach 26,000 million cubic meters.
— Pan American Energy (a joint
venture between BP and Bridas) announced that their Argentine
production of natural gas was enlarged by 2.5 million cubic meters
daily. This level of production was reached once the Macueta-Piquirenda
gas pipeline started to function. The company invested US$ 110
million in the building of this pipeline.
— Winterhshall invested US$ 84
million in Argentina to explore and produce gas and oil in 2006.
— On 23 August the Argentine government
announced the reactivation of nuclear activity in the country,
by deciding to update its power plants (Atucha I and Embalse),
by completing a partially built nuclear power plant (Atucha II)
and by studying to build a new power plant and resume production
of enriched uranium and heavy water.
— The Inter-American Development
Bank announced on 2 August a US$ 550 million loan to finance a
1,220 kilometers 500 kV electric power transmission line that
will link the Northwest and Northeast regions of Argentina. It
includes the construction of provincial and regional transmission
and sub-transmission works and transformer station.
— Occidental Petroleum Oil Company
has recently confirmed its intention to double oil production
in Argentina within five years. This project would demand a total
investment of US$ one billion.
— Repsol YPF plans to increase
investments in Argentina's southern Chubut province to US$ 630
million over the next three years.
— The Argentine Congress approved
in September a new hydrocarbon law, which creates a fiscal incentive
to stimulate oil and gas production in the country.
GOVERNMENT REGULATIONS
Regulations on prices, amount and destiny of
investments on goods which affect the whole Society is a common
Mature of any modem democracy. Only yesterday OFGEN released its
Price control review.
Argentina is just coming out from its worst
social and economic crisis, including a huge devaluation of the
peso. In a country with an appalling past of inflation it was
and is essential to control price increases. This control includes
fiscal austerity, a tight monetary policy and negotiations on
goods and utilities prices with the producing firms. This is a
short-term instrument until readjustment is done in the economy.
In the meantime GDP is sustainable growing at very high rates
for the forth year in the row.
9 October 2006
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