Chile’s ENAP recovers oil concession revoked when Argentina seized YPF from Repsol

ENAP lost the Campamento Central-Cañadon Perdido oil field because the field's operator and ENAP partner in Argentina, the then-privately held oil company YPF SA, belonging to Spain’s Repsol, was at odds with the Argentine government, which argued the field lacked investment.

The dispute between Argentina's government and YPF ended with President Cristina Fernandez decreeing the seizure of a 51% stake of YPF from Repsol YPF SA.

ENAP international unit, Sipetrol Argentina SA, holds 50% of the Campamento Central-Cañadon Perdido oil field, with YPF holding the remainder.

The field produces 5,000 barrels a day, and ENAP invested 47 million dollars in it as of September 30, 2011. ENAP Sipetrol Argentina holds another three Argentina Patagonia concessions, which it is currently exploring.

In related news Moody’s Investors Service announced it had cut the credit rating of ENAP. The Chilean state owned company was reduced to Baa2, the second lowest investment-grade rating, from Baa1, Moody’s said in an e-mailed statement, citing high debt levels and two straight quarterly losses.

Higher oil prices and a narrower gap between light and heavy crude prices have hurt the company’s finances in the past six months, Moody’s said, adding the rating may be cut further.

“Without a significant capital infusion from the Chilean government we believe ENAP will be challenged in materially reducing debt levels to a level more consistent with its underlying credit assessment,” Moody’s wrote.

Investors demanded an extra yield, or spread, of 251 basis points, to buy ENAP 10-year bonds instead of US Treasury note. ENAP has 218 million dollars of bonds coming due this year and a 110 million next year, according to private estimates.