The French oil company is seeking damages from the Argentine government after the state's decision to block petroleum price rises in regulated industries. The company also cited the impact from the peso's devaluation, and said it had invoked clauses of a Franco-Argentine bilateral investment protection treaty. TotalFinaElf, which has invested $1bn in Argentina since 1978, said its gas transport, electricity and liquefied petroleum gas businesses have all been impaired. The government's decision to end parity between the peso and the US dollar was accompanied by the over-riding of clauses that gave groups supplying public services such as water and electricity the right to raise prices in line with the dollar and inflation. TFE is understood not to have made any financial provisions for the impact on its operations of the devaluation and subsequent events at this time, in contrast to Suez, the French utility operator, which has also been hit in Argentina. TFE is understood to have invoked proceedings under the Bilateral Investment Protection treaty between France and Argentina last month. The treaty provides for the Argentine government to compensate French companies for losses when they arise from acts or omissions by the Argentine government. If the parties fail to agree, TFE could appeal to the International Centre for the Settlement of Differences over Investments, a tribunal established set up by the World Bank. Argentina accounts for 2 per cent of the group's operating profit and less than 5 per cent of capital employed.
The choice of the city of Helsinki is not incidental as the capital of Finland had hosted US-Soviet negotiations on the limitation of nuclear stockpiles in 1969