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September 15, 2005

H. Roger Schwall

Assistant Director

Division of Corporation Finance

United States Securities and Exchange Commission

450 Fifth Street, N.W., Mail Stop 7010

Washington, D.C. 20549-0405

    Re:

    Apco Argentina Inc.

Form 10-K for the fiscal year ended December 31, 2004

Filed on March 14, 2005

Commission file number 0-08933

Dear Mr. Schwall:

On behalf of Apco Argentina Inc. (“Apco”), a Cayman Islands corporation, set forth below is our
response to the three comments by the staff of the Division of Corporation Finance received by
letter dated August 23, 2005:

Form 10-K for the Fiscal Year Ended December 31, 2004

Financial Statements

Consolidated Statements of Income, Page 27

1. We noted that you have included “Equity income from Argentine investments” as a component of
revenues. Please tell us why you believe this presentation is appropriate. Please refer to Rule
5-03(b) (1) of Regulation S-X.

Response:

“Equity income from Argentine investments” represents earnings from Apco’s 40.803 percent stock
ownership in Petrolera Entre Lomas, S.A. (“Petrolera”), a non-public Argentine corporation. APB
Opinion No 18, “The Equity Method of Accounting for Investments in Common Stock,” and EITF 00-1,
“Investor Balance Sheet and Income Statement Display under the Equity Method for Investments in
Certain Partnerships and Other Ventures,” specify the equity method for this investment due to the
incorporated legal entity status of Petrolera.

Rule 5-03 (b)(13), addressing “Equity in earnings of unconsolidated subsidiaries and 50 percent or
less owned persons,” states “if justified by the circumstances, this item may be presented in a
different position and a different manner (see 210.4-01(a)).” Rule 4-01(a) notes that “financial
statements should be filed in such form and order, and should use such generally accepted
terminology, as will best indicate their significance and character in the light of the provisions
applicable thereto.”

Apco has historically been of the opinion that inclusion of equity earnings in revenues on the face
of the statement of income was permitted pursuant to the exception noted above in Rule 5-03(b)(13).
Apco’s principal business is the exploration, production and development of oil and gas in the
Entre Lomas concession. Apco’s 52.85 percent interest in Entre Lomas consists of a 23 percent
direct participation in the Entre Lomas joint venture and a 29.85 percent indirect participation in
the joint venture through Apco’s stock investment in Petrolera. Petrolera’s sole business has been
the operation of and its ownership in the Entre Lomas concession. The combination of Apco’s direct
and indirect interest in the Entre Lomas joint venture gives Apco a combined 52.85 percent
participation in Petrolera’s only business. Because the Company’s stock ownership in Petrolera
represents more than 50 percent of Apco’s interest in the Entre Lomas joint venture, we concluded
that our equity ownership in Petrolera was an integral part of the Company’s oil and gas operations
and was of such significance in proportion to the Company’s overall oil and gas operations that the
presentation of “Equity income from Argentine investments” in a different position and in a
different manner (i.e., in the revenue section of the statement of income) was justified.

After reference to Rule 5-03 (b)(1), addressing “Net Sales and Gross Revenues,” we propose that
“Equity income from Argentine investments” be presented beneath Income from Operations as a
component of Investment Income (Loss) in our Consolidated Statements of Income. An amended
presentation of the Consolidated Statements of Income for the three years ended December 31, 2004
is attached.

We respectfully propose to modify our future filings, beginning with the Form 10-Q for the third
quarter 2005, relating to the classification of “Equity income from Argentine investments”.

Unaudited Supplemental Oil and Gas Information, page 38

2. We note that you have not presented separately, the company’s share of equity method investees’
oil and gas producing activities. Please refer to Appendix A, of SFAS 69 and modify your
disclosure to comply with SFAS 69 as written.

Response:

Apco’s share of our equity method investee’s oil and gas producing activities is presented in a
separate column titled “Equity Interest Petrolera” within the SFAS 69 disclosures. Our
consolidated oil and gas interests plus our equity interest in Petrolera equal Apco’s total oil and
gas producing activities. This is a different, yet more detailed, presentation from the summaries
and illustrations in Appendix A, of SFAS 69.

SFAS 69, Paragraph 24 and the related Appendix A, Illustration 3 refer to the disclosure of Results
of Operations for Oil and Gas Producing Activities. Apco is of the opinion that the exception in
SFAS 69, Footnote 7 applies and the inclusion of a results of operations disclosure is not required
in the Unaudited Supplemental Oil and Gas Information section. SFAS 69, Footnote 7 states “If oil
and gas producing activities represent substantially all of the business activities of the
reporting enterprise and those oil and gas activities are located substantially in a single
geographic area, the information required by paragraphs 24-29 of this Statement need not be
disclosed if that information is provided elsewhere in the financial statements.” All of Apco’s

operations are located in Argentina and its only business in Argentina is oil and gas exploration
and production. The information required in SFAS 69, Paragraph 24 is essentially the same
information provided in the Consolidated Statements of Income except for general and administrative
expenses.

Engineering Comments

Unaudited Supplemental Oil and Gas Information, page 38

Oil and Gas Reserves, page 38

Natural Gas, page 39

3. We note the footnote stating that the positive revision of 18.5 BCF in 2002 was for estimated
future fuel usage to be consumed in field operations. Please explain to us why this amount is
almost 28% of your total reported proved gas reserves. Also, tell us how you valued these reserves
in the Standardized Measure.

Response:

A substantial amount of gas is used for consumption in the Entre Lomas concession that accounts for
more than 80 percent of Apco Argentina Inc.’s total gas reserves.

Gas consumption is higher than what may be seen in other operations because of the nature and
complexity of this particular operation.

The Entre Lomas operation includes its own power generator to assure the reliability of electricity
required to power field operations and also a small liquids plant with capacity to produce liquids
only from gas produced in Entre Lomas. These facilities use natural gas to fuel their operation. In
addition, Entre Lomas is primarily an oil production concession that produces a substantial amount
of associated low pressure gas that requires compression. For the most part, our compressors
consume natural gas. Finally, gas is consumed for various other purposes, the largest of which is
heating and initial separation of produced fluids at our tank battery locations.

The Company’s reported gas reserves from estimated future fuel usage do not impact the value
reported in its standardized measure because the estimate of future gas consumption is treated as
an operating expense that offsets future gas sales. In our calculations, gas consumption expense is
valued at a purchase price equivalent to the sale price assumed for estimated future gas reserves
sold.

If you have any questions concerning the attached responses, please contact me at (918) 573-1616 or
by fax (918) 573-5630.

Sincerely,

/s/ Landy L. Fullmer

Landy L. Fullmer

Chief Financial Officer

APCO ARGENTINA INC.

CONSOLIDATED STATEMENTS OF INCOME

    (Amounts in Thousands

        Except Per Share

          Amounts)

    For the years ended December 31,

    2004

    2003

    2002

    REVENUES:

    Operating revenues

    $
    29,628

    $
    26,603

    $
    20,092

    COSTS AND EXPENSES:

    Operating expense

    5,997

    4,856

    3,716

    Provincial production tax

    3,595

    2,797

    2,066

    Transportation and storage

    449

    418

    367

    Depreciation, depletion and amortization

    5,440

    4,282

    4,662

    Exploration expense

    1,843

    1,898

    2

    Argentine taxes other than income

    1,396

    1,597

    1,330

    Foreign exchange (gains) losses

    (96
    )

    818

    1,715

    Selling, general and administrative

    2,699

    2,088

    1,460

    Other (income) expenses, net

    (57
    )

    314

    85

    21,266

    19,068

    15,403

    Total operating income

    8,362

    7,535

    4,689

    INVESTMENT INCOME (LOSS)

    Financial and other income

    277

    221

    213

    Equity income from Argentine investments

    11,657

    9,009

    3,514

    11,934

    9,230

    3,727

    Income before Argentine income taxes and cumulative
effect of change in

accounting principle

    20,296

    16,765

    8,416

    Argentine income taxes

    4,790

    4,336

    3,516

    Income before cumulative effect of change in accounting principle

    15,506

    12,429

    4,900

    Cumulative
effect of change in accounting principle, net of Argentine

income taxes of $583

    —

    —

    2,378

    NET INCOME

    $
    15,506

    $
    12,429

    $
    7,278

    Earnings
per ordinary share - basic and diluted:

    Income before cumulative effect of change in accounting principle

    $
    2.11

    $
    1.69

    $
    0.67

    Cumulative effect of change in accounting principle

    —

    —

    0.32

    NET INCOME PER SHARE

    $
    2.11

    $
    1.69

    $
    0.99

    Average ordinary shares outstanding- basic and diluted

    7,360

    7,360

    7,360

    Pro forma effect assuming the change in accounting principle is applied

    to all periods: NET INCOME

    $
    15,506

    $
    12,429

    $
    4,900

    NET INCOME PER SHARE

    $
    2.11

    $
    1.69

    $
    0.67

The accompanying notes are an integral part of these consolidated statements.