Argentina is aiming to attract more international investment into its energy industry despite discouraging signs of further constraints being put on oil companies already active in the country.

The latest potential disincentives have come in the form of ominous "investigations" into the accounting standards and related corporate practices at YPF S.A. and Repsol YPF S.A., two major oil companies with international connections.

Argentina is aggressively expanding its energy base amid anticipation of a surge in its 40 million population, increased consumer spending and industrialization fueled by revenue from commodity exports.

Reducing dependence on cash crops and raw material exports is a long-term aim of President Cristina Fernandez de Kirchner, who is widely tipped as the favorite to win a second term in the Oct. 23 presidential election.

Critics say the president's style of government is seen by business leaders as blowing hot and cold, an inconsistency in government actions and pronouncements that creates uncertainties about official attitudes to incentives for investors.

Earlier this week, Argentina's securities regulator announced moves to investigate the chairman and chief executive officer of YPF S.A., Argentina's largest oil producer, as part of a wider probe into the company's accounting practices.

Analysts said the move was fraught with potential diplomatic complications as several of the individuals are Spanish citizens.

Spain's Antonio Brufau is chairman of YPF but also chairman and chief executive officer of Repsol YPF S.A.., Spain's largest energy producer and YPF's parent company.

Repsol has been cutting its stake in YPF since last year through offerings in New York and private placements.

It's not at all clear how the investigation will be received by other existing and potential investors in Argentina, which is keen to develop natural gas and shale oil deposits in the Neuquen basin in Patagonia, southern Argentina. The basin's full expanse includes central Chile.

U.S. energy giant Exxon Mobil Corp. has agreed to spend $76.3 million to explore and develop shale oil and natural gas in the area in collaboration with Americas Petrogas Inc.

In May the region was credited with Argentina's biggest oil and gas find in two decades at Vaca Muerta formation. The U.S. Energy Information Administration identified the area as a potential source of 240 trillion cubic feet of recoverable gas.

Americas Petrogas Managing Director Guimar Vaca Coca said in a statement, "The next major shale development outside of North America will be in the Neuquen Basin." YPF announced the discovery after extensive exploration and scientific surveys in the area.

Analysts said the government would need to be more cautious in its handling of key investors and potential business partners in the oil and gas industry so as not to frighten them away with actions such as those focused on YPF and Repsol YPF.

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