BP’s Pan American Energy Faces Bribery Probe in Argentina

Argentina’s Chubut provincial prosecutor initiated a probe of alleged bribes by BP Plc (BP/)’s Argentine venture Pan American Energy LLC to extend its Cerro dragon oil field concession seven years ago.

Chubut prosecutor Miguel Montoya filed an investigation request with the province attorney general after it became public March 30 that the U.S. Securities and Exchange Commission initiated a similar probe in 2010. Judith Burns, a spokeswoman for the SEC in Washington, declined to comment when asked if the agency is investigating. Richard Wine, a BP spokesman, declined to comment on Chubut filing in telephone interview from London.

“If a judge rules bribes were paid to get the extension, the extension will be considered null and void even though it was approved by the local legislature,” Montoya said in a telephone interview from Rawson, Argentina. “In that case, the concession will expire in 2017.”

Pan American denied any wrongdoing today in full-page advertisements published in Argentine national newspapers. It was notified about an SEC probe in 2010 that sought to determine whether the company paid bribes to extend the Cerro Dragon concession in Chubut province in 2007, the company said.

Montoya, at Chubut provincial Governor Martin Buzzi’s request, asked BP and Pan American to provide the same information as in the SEC case, according to a registered letter obtained by Bloomberg News.

Crude Exports

Pan American’s Cerro Dragon field generates two-thirds of the company’s crude output. Pan American exports 40 percent of its Cerro Dragon production, according to a company regulatory filing.

Guillermo Baistrocchi, a spokesman for Pan American in Buenos Aires, didn’t reply to a telephone call seeking comment.

Clarin, a Buenos Aires-based newspaper, published a story on March 30 that the SEC was investigating after BP said Pan American Energy may have made illegal payments to Argentine tax and government authorities.

Pan American dollar bonds due 2021 fell 0.06 cents on the dollar to 101.8 cents at 11:14 a.m. in New York, pushing yields up to 7.5 percent. Argentine benchmark government bonds due 2017 rose 0.04 cents on the dollar to 93.1 cents. The company has $500 million in outstanding bonds.

To contact the reporter on this story: Pablo Gonzalez in Buenos Aires at pgonzalez49@bloomberg.net

To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net Robin Saponar

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