UpdateArgentina begins YPF takeover

16 April 2012 18:45  [Source: ICIS news]

Latin America(Includes updates throughout)

MEDELLIN, Colombia (ICIS)--Argentina plans to send a bill to Congress to take 51% control of energy major YPF, a government official said on Monday.

The announcement on national television was made during a ceremony headed by Argentina President Cristina de Kirchner and comes amid escalating tensions and accusations of continued decline in oil and gas production in the country.

The takeover follows more than two months of government pressure on YPF, a unit of Spain’s Repsol YPF, to boost investment and output.

The stake in YPF would give the Argentine government access to its shale oil reserves and natural gas production.

Argentina has an estimated 774,000bn cubic feet (bcf) of technically recoverable reserves of natural gas, the third-largest behind China and the US, according to the US Energy Information Administration (EIA).

YPF said in February that the Vaca Muerta formation in southern Argentina holds at least 23bn bbl of oil, of which at least 13bn bbl belong to YPF, the company said.

The Argentine administration sought to block YPF dividend payments and backed provincial governments’ decisions to revoke 15 oil field licences since 13 March.

Argentina is expropriating YPF for the “public good,” a government official said at Monday’s meeting.

YPF’s output accounted for about 34% of the nation’s production in 2011, according to Argentina energy secretariat data.

YPF is also the country’s largest fuel retailer and refiner, with 52% of refining capacity and one of the largest petrochemical producers.

YPF owns three industrial sites, including La Plata in Buenos Aires, Lujan de Cuyo in the state of Mendoza and Plaza Huincul in the state of Neuquen. YPF also owns half of the Refinor plant in the northern state of Salta, according to YPF.

La Plata refinery accounts for 30% of Argentina’s refining capacity and has a capacity of about 251,600 bbl/day of capacity. The plant also produces base oils, lubricants and asphalts.

Lujan de Cuyo represents 17% of national refining capacity and has a processing capacity of about 141,000 bbl/day, according to Repsol. The Plaza Huincul plant has a capacity of 33,500 bbl/day.
The board of Repsol-YPF approved in May 2007 the creation of Liquified Natural Gas and YPF. The YPF division managed the company's Argentinean assets.

Repsol, YPF and the office of Cristina de Kirchner did not return phone calls or emails on Monday seeking further comment.

Additional reporting by Al Greenwood


By: Leela Landress
+1 713 525 2653



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