Published November 22, 2012
BUENOS AIRES, Argentina – Argentina is running out of wiggle room in a billion-dollar showdown over foreign debts left unpaid since the country’s world-record default a decade ago, and the stakes couldn’t be higher for President Cristina Fernandez.
She risks triggering another historic debt default if she doesn’t agree to pay the so-called “vulture funds” she blames for much of Argentina’s troubles.
Fed up with Argentina’s refusal to honor its debts despite losing in appellate court, U.S. District Judge Thomas Griesa in New York said he is determined to make Argentina pay at least something to the plaintiffs.
His idea is to tap into the money Argentina already pays to other bondholders, by making banks that process the payments divert some of the money to the plaintiffs. U.S. financial institutions would become his enforcers, either helping to satisfy the judgment or “aiding and abetting” a crime.
The unprecedented idea was broadly upheld on appeal last month and Griesa tried to push the case closer to resolution late Wednesday by lifting a legal stay, and issuing an order directing Argentina to make a first round of payments into an escrow account on Dec. 15, when the country is scheduled to make payments to the other bondholders.
The idea has sent jitters through the legal departments of the most powerful financial institutions in the United States.
The U.S. Federal Reserve and the Clearing House, a trade group representing the world’s largest commercial banks, warned that Griesa’s remedy could have severe consequences for the backbone of the U.S. financial system, which automatically moves an average of $2.6 trillion a day in half a million transfers between more than 7,000 banks.
The Federal Reserve’s legal brief, filed Sunday, said the entire system depends on transfers being “immediate, final and irrevocable” when processed. Requiring intermediaries to identify, stop and divert payments according to court orders “would impede the use of rapid electronic funds transfers in commerce by causing delays and driving up costs.”
The plaintiffs dismissed the concerns, saying that the only bank at risk would be Argentina’s “paying agent,” the Bank of New York Mellon, which should be held responsible by the court if it doesn’t guarantee compliance.
Still, the Federal Reserve’s filing pleased Fernandez so much that she cited it in a speech Monday night.
“When an Argentine says something, the President of the Argentines or the economy minister, well, everyone comes out to criticize them, but now it’s (Federal Reserve Chairman Ben) Bernanke talking, honey, and everyone shuts their little mouth,” she said.
As with so many other things involving Argentina, these debts date back to the bloody dictatorship that ruled from 1976-1983. The military junta tripled the country’s foreign debts. By 2001, the burden had become unsustainable and the economy collapsed. Argentina’s $95 billion default still stands as a world record.
Sovereign debt is supposed to be paid no matter who runs a country, but Fernandez has always considered this defaulted debt to be illegitimate, forced onto the Argentines by dictators acting in concert with international financial speculators. She and her late husband and predecessor Nestor Kirchner, who took office in 2003, have never made any payments on the defaulted bonds.
Instead, they offered new bonds paying less than 30 cents for each dollar owed in default, and by 2010, 93 percent of the original bondholders agreed to the swaps. The debt relief granted by these “exchange bondholders” enabled Argentina to climb out of a deep economic crisis, and many analysts have described it as a model for Greece and other debt-burdened countries to consider.
Hold-outs led by NML Capital Ltd., an investment fund owned by U.S. billionaire Paul Singer, refused the swaps, insisting on payment in full plus interest, even though some bought the defaulted debt for pennies on the dollar after Argentina’s economy collapsed. Singer’s lawyers have traveled the world since then seeking to embargo Argentine assets, even getting its navy ship Libertad seized in Ghana as collateral. But they have never collected.
The judge’s solution to all this is to force Argentina to pay the holdouts an equal amount each time it makes a payment to the exchange bondholders.
This prompted an outcry from a group of exchange bondholders who collectively own $20 billion in the restructured Argentine debt. They said they “already suffered tens of billions of dollars in losses,” and that it’s not fair to harm their already diminished returns so that a few holdouts can earn up to 200 percent on their original investments.
If allowed to stand, this kind of remedy will make it impossible for other countries to get critical debt relief, they argued.
The holdouts’ response: “Those parties made a business judgment to accept assurances of prompt payment rather than being forced to litigate against the Republic around the world, as the plaintiffs have been forced to do at tremendous expense.”
Argentina, meanwhile, has told the judge that its responsibility ends once it delivers the cash to the Bank of New York Mellon, which in turn pays the exchange bondholders. This bank, in turn, said it would suffer lawsuits from all sides if it did anything other than process the payments as intended.
There was no immediate indication from Argentina’s government late Wednesday about how it would respond to Griesa’s ruling.
The judge said he was taking the action precisely because of “inflammatory declarations” made by Argentine officials, who have vowed not to pay a cent to NML Capital Ltd.
“It is the view of the District Court that these threats of defiance cannot go by unheeded, and that action is called for,” Griesa wrote.
Argentina is running out of options. Anything short of full payments could trigger holders of all sorts of Argentine bonds to demand immediate payment in full.
“In reality, what I think they’re looking for is to provoke a technical default,” the president said Monday night. “What’s a technical default? It’s when you pay, but not in the right time, or manner, or place. For example, you don’t pay in New York so that they don’t seize the money.”
The exchange bondholders warned that if this happens, “the injunction will have turned a relatively minor default into a cataclysmic default that will further unsettle the already fragile global economy.”
Fernandez sought to calm matters, noting that Argentina has $45.3 billion in reserves and a much lighter debt burden than it did years ago.
But if Argentina pays the plaintiffs the $1.43 billion they are demanding, Moody’s Investors Service said it could set a legal precedent for other holdouts who together claim nearly $12 billion in unpaid debts.
A default, meanwhile, could put more pressure on an economy already suffering from capital flight and dangerously high inflation. Argentine debt is already rated by Moody’s as junk, so the government has few other places to turn for financing.
The holdouts blamed all this “emergency litigation and anxiety” on Argentina’s “unrelenting bad faith,” and predicted that if it is finally given no other alternative, it will submit to the courts’ will.
“There is no reason to believe — and common sense rejects — the notion that Argentina would harm its reputation and credit, and unnecessarily allow tens of billions of dollars of debt to accelerate, simply to avoid paying the plaintiffs $1.43 billion,” they said.
Thursday, May 10, 2012 – by Staff Report
Argentine Vice President Amado Boudou on Tuesday urged US companies to invest in YPF, the nationalized oil company that Argentina recently expropriated from Spain’s Repsol … “We are very optimistic in terms of what is coming for the Argentine economy in general and the hydrocarbons sector specifically” Boudou said at a Conference on the Americas at the US State Department in Washington. Far from scaring off foreign investment because of the expropriation, the government of President Cristina Fernandez has set the framework for “excellent opportunities for those who want to invest in joint ventures and possibilities of joint work in the energy sector,” he said. The Cristina Fernandez administration is gambling that the discovery in May 2011 of a giant oilfield in Argentina’s Patagonia would be too tempting for foreign oil giants to ignore. YPF needs the know-how and the capital to fully exploit the oil fields in the south-western Nequen province, known as Vaca Muerta (Dead Cow), which according to official estimates holds 150 million barrels of oil. YPF is “open to capital and the possibility of working together with public or private companies in Argentina or abroad,” Boudou said. – Merco Press
Dominant Social Theme: Don’t cry for Argentina. It’s all under control …
Free-Market Analysis: Are Argentina’s top officials having second thoughts about their expropriation of Spain’s Argentine oil-producer? It would seem that way from the above news report via Merco Press.
If the move was as wildly destructive as people think it may have been, then this posture would tend to confirm the idea that one of the world’s more powerful and influential states is simply spinning out of control.
The results may be truly catastrophic, not just for Latin America but for the larger, struggling world.
This boom may well be ending – or certainly growing long-in-the-tooth after a decade or more.
Although the Argentine expropriation of Repsol made major shock waves, the Argentine government under President Cristina Fernandez has portrayed it as a judicious and necessary gambit.
Many other observers regardless of political affiliation have branded the move as a shallow populist one that will bring disaster to Argentina and environs.
As the predictions of damage mount, there is more speculation that Fernandez’s action may bring down not only her own government but other regional governments as well.
These predictions involve inevitably a peso devaluation that will set off a dollar-withdrawal frenzy in big regional banks. Real estate prices – radically inflated after a decade of monetary expansion – may well plunge. The results could affect large swaths of South America.
Countries that could be affected include Uruguay, Brazil, Chile and Peru among others – all countries that have pursued moderate market-based policies and have benefitted from the South American industrial and monetary boom.
Meanwhile, Repsol doesn’t seem apt to surrender. Here’s more from the article.
YPF is “open to capital and the possibility of working together with public or private companies in Argentina or abroad,” Boudou said.
Last week the Argentine president signed a bill expropriating 51% of YPF stock from Repsol, its majority shareholder, sealing a measure that has roiled the country’s trade ties with Europe.
Cristina Fernandez has argued that the move was justified because Argentina faces sharp rises in its bill for imported oil, and Repsol has failed to make agreed investments needed to expand domestic production.
In Madrid, a Repsol spokesman Tuesday said the company has warned its competitors that they will face legal action if they invest in YPF.
“The idea is to protect the assets that were confiscated in Argentina until the situation is resolved in a satisfactory way for the parties that are involved,” the spokesman said.
Conclusion: A cascading crisis in South America may still seem likely …
- Argentina: Vaca Muerta – Argentina’s oil and gas seizure poses new dilemma (mb50.wordpress.com)
- Incensed Spain threatens Argentina after YPF seizure (mb50.wordpress.com)
- Leftist economist masterminds Argentina’s YPF grab (mb50.wordpress.com)
- This Is Why President Cristina Kirchner Is Not Good For Argentina (businessinsider.com)
- Argentine Congress easily approves YPF takeover (fuelfix.com)
- BOOM: Argentine Parliament Votes To Nationalize YPF (YPF) (businessinsider.com)
- Leftist economist behind Argentina’s YPF takeover (sacbee.com)
- Argentina Backs Nationalization of YPF Oil Firm (theepochtimes.com)
- Incensed Spain threatens Argentina after YPF seizure (mb50.wordpress.com)
By Vladimir Hernandez BBC Mundo
It is a grim name, though it has nevertheless brought hope of a better future for many in Argentina: Vaca Muerta – translated from the Spanish – means “Dead Cow”.
Vaca Muerta’s barren landscape covers some 30,000 remote sq km of the Patagonian province of Neuquen, in the west of Argentina.
And it was here where energy giant Repsol-YPF struck gold last year. Black gold.
Buried in 250-million-year-old rocks, almost 3km beneath the surface here, are some of the world’s largest reserves of shale oil and gas.
According to the Spanish energy giant Repsol, there are prospective resources equal to more than 21 billion barrels of oil underneath the ground in Vaca Muerta.
Much of it could be shale oil, rather than gas, according to an independent Ryder Scott audit commissioned by Repsol, though this has yet to be proven.
But the presence of shale gas is proven, and it is clear that the reserves found here will make up a big proportion of the country’s estimated 22 trillion cubic-metre total.
That makes Argentina the world’s number three in terms of shale gas reserves – hot on the heels of the US, which has reserves of some 24 trillion cubic metres, and China, which has reserves of some 36 trillion cubic metres, according to the American Energy Information Administration.
Failure to invest
Getting the reserves out would obviously require massive investment.
Argentina’s government believes Repsol – which has been active here ever since it took over YPF when it was privatized during the 1990s – should have done this.
But instead, it says, Repsol has been dragging its feet, invested too little and thus failed to get the resources out of the ground as quickly as it should have done.
The government has even accused Repsol of pulling YPF’s profits out of the country to finance its businesses abroad.
President Cristina Fernandez said:
“If such a situation continued, we would have had big energy problems in the country because of the drop in production and the increasing reliance on fuel imports.”
So the government has stepped in to take control of what it sees as a vital, national asset.
Rodrigo Alvarez Argentine economist:
This is the real reason behind the renationalization of YPF”
Renationalizing YPF has in effect helped the government regain control of the Vaca Muerta energy reserves, since the rights to exploit more than a third of the area were held by Repsol-YPF.
The move, and the manner in which it was made, has obviously created a great deal of controversy.
Repsol and others believe the government was motivated by a desire to secure the country’s energy requirements for decades to come, and thus reduce its gas import bill which shot up to $10bn in 2011 and is expected to surge to $14bn this year.
“This could help cope with between 30% and 40% of the gas demand within Argentina, which has been covered with costly imports in the last two years,” says Eduardo Barreiro, an energy consultant and a director at the Society of Petroleum Engineers in Argentina.
Argentine economist Rodrigo Alvarez Litre agrees:
“This is the real reason behind the renationalization of YPF,” he wrote in a column in the Argentine newspaper, Perfil.
“With such shale gas reserves, Argentina could position itself as a nation with cheap and abundant energy, and profit from the high prices in the international market.”
Argentina’s government might describe its move as a step towards self-reliance, which it believes is clearly in the nation’s interest.
“Vaca Muerta could be a very important area in the future,” Mr Barreiro says.
“But it needs investment.”
Some $3bn would be required over the next three years to get the shale gas extraction started.
And then, he added: “You’ll need to be excavating constantly to keep the production levels high enough to justify the investment and to make a profit.”
According to Repsol, more could be achieved with more investment. The firm insists that some $25bn per year would be needed to exploit Vaca Muerta’s shale oil and gas potential. This, the company believes, could double the Argentine production in 10 years.
But this would require some 3,000 shale oil and gas wells in an area where there are only 28 at the moment.
Without Repsol, the government might well look to other foreign investors for help to make it happen.
But Daniel Kokogian, a geologist who works as an advisor for several foreign energy companies in Argentina, said some companies would be concerned about how they might be treated in the future, following the renationalization of YPF.
“What private investor would put money into a business where national interest will come first, then profits?” he asks.
Others are far more optimistic about Argentina’s chances to attract foreign investors.
The government says it has already had talks with energy giants such as Total of France and Petrobras of Brazil – and local energy analyst Victor Bronstein expects deals to be struck.
“Oil companies are constantly operating in turbulent environments, in problematic countries,” he says.
“If they think there’s a business opportunity, that there’s a possibility of resources, they’ll dive in.”
Besides, cash-rich states may well be keen to get involved, according to Mark Routt, a senior consultant with KBC Advanced Technologies in Houston, Texas.
“Argentina is going to have to look for government-government relationships, particularly with China,” he says.
But Mr Kokogian says he believes the main concern of most investors will be whether or not Vaca Muerta is going to deliver decent margins.
“The main issue here is to determine if these estimated resources can actually be called reserves,” he said.
“A resource becomes a reserve when it is proven that the investment can be recovered with an acceptable profit. In Vaca Muerta, I don’t think that has happened yet.
“If this area was truly the main reason behind the nationalization of YPF, then Argentina may have shot itself in the foot over an unproven source of energy,” he adds.
And if that turns out to be the case, the Argentine efforts to control “Dead Cow” could be a bit like flogging a dead horse.
- Repsol YPF ups Argentine shale potential (mb50.wordpress.com)
- Incensed Spain threatens Argentina after YPF seizure (mb50.wordpress.com)
- Is Cristina Fernandez destroying Argentina’s economy? (business.financialpost.com)
Argentina once again warned oil companies considered by the Government to be “illegally operating” in the Falklands/Malvinas Islands, and reiterated it will press charges against them unless they justify their actions before next Wednesday, May 2.
In a recent statement released to the press, the ministry said that on last April 17th, all oil companies currently performing exploration tasks in the ‘Malvinas basin’ were notified “of their clandestine actions and their consequences” by the Argentine embassy in the United Kingdom.
The Argentine government has set a May 2 deadline for companies to justify their activities.
“If case of failure to offer a response and once the legal deadline expires, we will issue the corresponding sanctions to every company according to a resolution by the Argentine Energy Secretariat, which considers these activities to be clandestine. The Government will also proceed to press criminal and civil charges,” the ministry warned.
The Foreign Affairs release states that by doing this they “reaffirm Argentina’s decision to defend the nation’s sovereign rights by any peaceful means possible – both legal and diplomatic- as well as the country’s natural resources, which belong to the Argentine people.”
- Incensed Spain threatens Argentina after YPF seizure (mb50.wordpress.com)
- Argentine Senate nears approval of YPF takeover (sacbee.com)
- US State Department condemns Argentine expropriation of YPF Oil Company (alethonews.wordpress.com)
- Argentine threats against oil companies near Falkland Islands ‘bizarre and ridiculous’ (telegraph.co.uk)
- Argentina ‘satisfied’ by BP’s Falklands rejection letter (telegraph.co.uk)
MADRID – An incensed Spain threatened swift economic retaliation against Argentina on Tuesday after it announced plans to seize YPF, the South American nation’s biggest oil company, in a move which pushed down shares in Spanish energy giant Repsol, the controlling shareholder.
Madrid called in the Argentine ambassador in a rapidly escalating row over the nationalization order by Argentina’s populist and increasingly assertive president, Cristina Fernandez, a move which delighted many of her compatriots but alarmed some foreign governments and investors.
Promising action in the coming days, Spanish industry minister Jose Manuel Soria said: “With this attitude, this hostility from the Argentine authorities, there will be consequences that we’ll see over the next few days. They will be in the diplomatic field, the industrial field, and on energy.”
“Argentina has shot itself in the foot,” said Foreign Minister Jose Manual Garcia-Margallo.
Despite the rhetoric, Spain appeared to have little leverage over Buenos Aires – any action to be taken will be determined at a cabinet meeting on Friday – and Argentina has proven impervious to such pressure in the past.
Repsol said YPF was worth $18 billion as a whole and it would be seeking compensation on that basis, but the Spanish oil major’s shares fell by 7.5 percent in Madrid on Tuesday. The company said it could raise money in the bond market and sell some assets to help its cash flow.
Repsol described Argentina’s move as “clearly unlawful and seriously discriminatory” and said it would take legal action.
“This battle is not over,” Repsol Chairman Antonio Brufau said. “The expropriation is nothing more than a way of covering over the social and economic crisis facing Argentina right now.”
But Fernandez dismissed the risk of reprisals. “This president isn’t going to respond to any threats … because I represent the Argentine people. I’m the head of state, not a thug,” she said.
European Commission President Jose Manuel Barroso said he expected Argentina to uphold international agreements on business protection with Spain. “I am seriously disappointed about yesterday’s announcement,” he said in Brussels.
But action against Argentina appeared limited in scope. The EU Trade Commissioner would write to Argentina’s trade minister to “reiterate our serious concerns” while an EU-Argentine meeting this week would be postponed.
“It’s absolutely shameful considering everything that Spain has done for Argentina,” said a woman called Domi, who was filling her tank at a Repsol petrol station in Madrid.
“I hope the government takes measures and does something serious. They’ve pulled our leg long enough!”
Spanish media condemned the Argentine action, believed to be the biggest nationalization in the natural resources field since the seizure of Russia’s Yukos oil giant a decade ago.
La Razon newspaper carried a photograph of Fernandez on its front page in a pool of oil with the headline: “Kirchner’s Dirty War”, referring to her full name. The business newspaper La Gaceta de los Negocios called the takeover “an act of pillage”.
El Periodico spoke of “The New Evita”, pointing out that Fernandez had announced the nationalization in a room decorated with a large portrait of Eva Peron, the actress who was married to a president and revered by many Argentines as a populist mother of the nation and champion of the poor.
Repsol’s Brufau said he suspected nationalization of YPF was imminent when he tried to contact Fernandez last Friday and was told that the president “was angry” and did not want to speak.
YPF has been under pressure from Fernandez’s centre-left government to boost oil production, and its share price has plunged in recent months on speculation about a state takeover.
Spanish investment in Argentina may now be at risk after the move on YPF. In the “reconquista” or reconquest, of the 1990s, newly privatized Spanish businesses bought Latin American banks, telephone companies and utilities, much as their armor-clad ancestors had conquered the region 500 years earlier.
Through its latest nationalization move, Argentina runs the risk of frightening off foreign investors, key to contributing money to help develop one of the world’s largest reserves of shale oil and gas recently discovered in the Vaca Muerta area.
ACE UP ITS SLEEVE?
This led some analysts to question whether Argentina might have an ace up its sleeve in the form of a new partner such as China Petrochemical Corp (Sinopec Group).
Repsol has, however, identified Vaca Muerta as “the cause of the pillage”, or the reason Argentina went after its YPF share.
A Chinese website said Sinopec was in talks with Repsol to buy YPF for more than $15 billion, although other sources said the nationalization move would probably get in the way of such a deal. Sinopec dismissed the report as a rumor.
Fernandez said the government would ask Congress, which she controls, to approve a bill to expropriate a controlling 51 percent stake in YPF by seizing shares held exclusively by Repsol, saying energy was a “vital resource”.
“If this policy continues – draining fields dry, no exploration and practically no investment – the country will end up having no viable future, not because of a lack of resources but because of business policies,” she said.
YPF’s market value is $10.6 billion, although an Argentine tribunal will be responsible for valuing the company as part of the takeover. Central bank reserves or state pension funds could be used for compensation.
Fernandez, who still wears the black of mourning 18 months after the death of her husband and predecessor as president Nestor Kirchner, stunned investors in 2008 when she nationalized private pension funds. She has also renationalized the country’s flagship airline, Aerolineas Argentinas.
Such measures are popular with ordinary Argentines, many of whom blame free-market policies such as the privatizations of the 1990s for the economic crisis and debt default of 2001/02.
Her announcement of the YPF takeover plan, however, drew strong warnings from Spain, Mexico and the European Union, a key market for Argentina’s soymeal exports.
Mexico’s President Felipe Calderon said Fernandez’s plan would damage chances for future foreign investment in Argentina and hurt Repsol, in which Mexico’s state oil monopoly Pemex holds a 10-percent stake.
Venezuela, where socialist President Hugo Chavez has nationalized almost all the oil industry, applauded her move.
The row over YPF comes as Fernandez heaps pressure on Britain over oil exploration off the Falkland Islands, over which Argentina claims sovereignty.
- Spain threatens Argentina after YPF seizure (business.financialpost.com)
- Argentina To Seize Control Of Oil Firm (news.sky.com)
- EU calls off meeting with Argentina over Repsol (newsok.com)
- Argentina moves to renationalize leading oil company (ctv.ca)
April 14, 2012 10:27 pm by Jude Webber
Any hostile moves on YPF, the Spanish-controlled oil company, by the pro-nationalisation government in Buenos Aires could have implications that go way beyond the companies and investors at the heart of this bitter tug-of-war.
Why? Because Argentina is sitting on what geologists and energy experts widely agree is one of the world’s most attractive reserves of unconventional gas and oil – known as shale – which are trapped deep in the bedrock below ground.
Shale is potentially a very big deal indeed. It turned the US from energy importer to exporter – something that Argentina, which spent $9bn importing fuel last year, ought to take note of.
Argentina has about a third of the US shale reserves, but they are less deep (which makes them cheaper and easier to access), seams are two to three times thicker than in the US and, for now at least, Argentine shale is concentrated in the Vaca Muerta (Dead Cow) formation, rather than being spread out across the country.
So all other things being equal, shale producers should be brushing up their Spanish and heading south. Several big players – including ExxonMobil, Total and Apache – and smaller companies already have. But it is YPF which has the biggest acreage, and it estimates that as much as $250bn will be needed to develop a viable shale industry over the next decade.
No one’s pockets are that deep, so partnerships are the way to go. Except that regulatory concerns are raising red flags before investors’ eyes now.
YPF has been publicly criticised, stripped of a string of concessions after being accused of underinvestment and now the government is analysing how to give the Argentine state a bigger role in the company – something that, according to some proposals circulating in the government, could translate into the expropriation of as much as 50.01 per cent of the company.YPF is currently controlled by Repsol of Spain, which has 57.43 per cent, and 25.46 per cent is in the hands of the Eskenazi family’s Petersen Group. Just over 17 per cent is traded on stock markets.
So enthusiasm among potential new players in the shale sector – where some were prepared to invest as much as $10,000 to $12,000 per hectare, according to industry sources – is screeching to a halt. “This is damaging shale (prospects), of course,” Alieto Guadagni, a former energy secretary, told beyondbrics.
The government has been berating YPF for what it perceives as a failure to invest enough, yet the concerns its nationalization dream are raising risks reducing investor appetite – which is perverse. And if concerns over contracts were not enough to dampen investors’ spirits, the prospect of partnering with a state that likes fast results and dislikes repatriation of dividends may give pause for thought.
What is worse is that the shale prospects represent energy that Argentina badly needs. Underinvestment in the sector, analysts and industry players say, is the direct result of a regulatory regime that keeps prices in Argentina well below the international market.
As Guadagni put it, Argentina pays domestic gas producers some $2.8 per million British Thermal Units, yet shells out some $11 per million BTU for gas from Bolivia (produced, ironically, by Repsol YPF), and some $17 for liquefied natural gas to plug its huge energy deficit.
Meanwhile, the cost to Argentines for their domestic gas is about 50 US cents per million BTU of gas, and drivers of vehicles that run on compressed natural gas pay around $1.
“The big question is whether these plans for YPF will improve or worsen Argentina’s prospects for recovering its energy self-sufficiency,” Guadagni said.
Argentina had a $3bn energy surplus in 2006. This year, Guadagni reckons the deficit will be $6bn to $7bn, ballooning to $12bn in 2013. Argentina’s policy of cheap domestic energy to stoke demand and economic growth worked well after the country’s default of nearly $100bn in 2001. But it isn’t working now.
- Repsol YPF ups Argentine shale potential (mb50.wordpress.com)
- Spain warns Argentina over energy nationalisation (1oneday.wordpress.com)
- Argentina plots next moves in bid to control YPF (sfgate.com)
- Repsol YPF ups Argentine shale deposit potential (seattlepi.com)
- YPF Said to Lose Oil Partners as Government Cracks Down (businessweek.com)