MercoPress. South Atlantic News Agency

Repsol CEO in Argentina trying to prevent YPF takeover by the government

CEO Brufau apparently is prepared to help overcome Argentina’s serious energy shortage

Repsol's chairman Antonio Brufau has asked for a meeting with officials from the Argentine government, which investors fear could seize control of the Spanish oil major's unit in Argentina, YPF.

YPF is under heavy pressure from the government of President Cristina Fernandez to boost production to reduce fuel imports. Speculation about a possible re-nationalization has seen its market value fall by almost 30% since the start of the year.

“With the aim of continuing dialogue with the government, the chairman of Repsol, Antonio Brufau, who is in Buenos Aires, has made a formal request for a meeting” YPF said in a statement.

Brufau arrived in Argentina with three aides and is hoping for a meeting with Federal Planning minister Julio De Vido or/and the Executive Legal and Technical Secretary, Carlos Zannini, both the closest advisors to the president in the big issues.

Apparently Brufau is prepared to help Argentina overcome the current energy crisis, particularly the growing import bill which last year reached almost 11 billion dollars, as long as Cristina Fernandez guarantees respect for Spanish investments.

Since the conflict surfaced Brufau has visited Argentina in two previous occasions with the purpose of a personal interview with President Cristina Fernandez, but to no avail. King Juan Carlos is also known to have spoken with the president on two occasions.

According to the Buenos Aires media, YPF has several negotiation alternatives: one of them is to open the company’s stake to government participation; changing the whole management team; finding ways to remit profits out of Argentina and finally elaborate a major investment plan with other international oil companies operating in the country (Exxon, Total, Shell, Petrobras and Bridas).

But Brufau is also expected to warn that if the escalade against Repsol continues, the Spanish government is prepared to take the case to international forums which would include commercial embargoes and court demands against Argentina.

However for Brufau that would be the last option. Meantime it wants to avoid Argentine provinces from suspending exploitation concessions as has happened so far in 15 areas in the provinces of Chubut, Santa Cruz, Neuquen, Rio Negro, Mendoza and Salta, which already represent over 12% of the company’s oil and gas extraction.