Argentina oil protest hits production in south for 12th day

Buenos Aires (Platts)--3Feb2006

Oil workers in southern Argentina's oil-rich region of Santa Cruz on Friday
entered their 12th day of a protest that's paralyzed production in the area as
they demand exclusion from income taxes, an oil executive said. 

      "There's been no change in the situation. Workers are blocking roads,
preventing access to fields," the executive of a company hit by the protest in
Las Heras, northern Santa Cruz told Platts. "Oil companies can't do anything
to resolve this. What they are asking for can only be addressed by the
government." 

     Spain's Repsol YPF, producer of 40% of Argentina's oil and 30% of its
gas, issued a statement last week saying the protest is cutting oil production
from its fields by around 62,900 b/d. That's equal to 9.4% of Argentina's
total average output of 666,100 b/d in the first 11 months of 2005, according
to the latest industry data.

     The other oil company hit by the protest is U.S.-based Vintage Petroleum.
La Heras is part of the Gulf of San Jorge, a maturing basin that accounts for
42% of Argentina's oil production and 9% of its output of 140-mil cu m/d of
natural gas. It holds around 46% of the nation's 2.5-bil barrels of proven oil
reserves.

      According to Argentine press reports, the protest was spreading to
cities, with roadblocks temporarily affecting other industries, residents and
tourists.

     Buenos Aires daily La Nacion reported Friday there's a judicial order to
break up the protest but Santa Cruz Governor Sergio Acevedo doesn't want to
use force. There is concern that an extended strike could limit oil exports
and also deliveries to refineries in Buenos Aires. 

      Last year a gasoil shortage was the result of extensive strikes and poor
weather at oil fields in Santa Cruz and elsewhere in the south that
interrupted deliveries to ExxonMobil's 80,000-b/d Campana refinery. The
strikes also helped push oil production to a 12-year low of 624,094 b/d in
October 2005.

     Argentina exports 25-30% of its crude and refines the rest, selling
petroleum products domestically and to foreign markets.

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