US oil companies interested in investing in YPF, but have their conditions…
At least four leading US oil corporations are interested in investing in Argentina’s nationalized YPF but are demanding a law that guarantees investments, direct export of oil and remittance of benefits.
According to Argentine government sources the companies that have been in contact include Exxon-Mobil, Chevron, ConocoPhillips and Apache and are ready to begin formal talks with YPF CEO Miguel Galuccio once the conditions are met.
Apparently in informal talks Galuccio admitted to a law that guarantees investments since this could also help counter Spain’s Repsol worldwide campaign warning peers that it is in the process demanding Argentina for the seizure of a majority stake in YPF.
The four US companies are not intimidated by Repsol’s campaign but want the same Congress that supported nationalization of YPF to pass a bill guaranteeing investments, the export of oil and profits remittance.
However such a move will have to wait until the end of the year since Argentina currently can’t guarantee the exit of earned dollars or barrels of oil giving the precarious situation of the Central Bank’s international reserves and the need to supply the fuel-hungry domestic market with every possible barrel of oil.
Argentine government sources revealed that the first contacts with US corporations was done by Ambassador Jorge Argüello in Washington a few hours after the nationalization bill was passed by Congress and later the Minister of Federal Planning Julio De Vido received representatives in Buenos Aires.
CEO Galuccio in a couple tours in the United States trying to attract investments was also given a similar message.
The revelations come a few days before CEO Galuccio is preparing another incursion in the US, particularly Houston to attract investors to help develop a company that will again allow the remittance of dividends in the ‘second phase’ and has plans to invest 35 billion dollars , drill 1.400 wells and create 10.000 jobs in the next five years.
These numbers can be read in a brochure from the Argentine embassy in Washington where Galuccio promises YPF will honour all requests and continue to trade in the New York Stock exchange.
The brochure says that YPF will recover its level of production of fifteen years ago and estimates in 3.5 billion dollars this year’s investment. There is also abundant information on opportunities to develop alternative energies in Argentina.
“In the first phase YPF plans to reinvest all of its earnings, but in the second phase there will be a policy of dividends consistent with the growth of the company. YPF will be managed taking into account the interests of shareholders”.
Galuccio says the target is to increase hydrocarbons production by 42% in five years.
“We will drill a thousand wells in 2013, a level of activity not seen since 1996 and we are adding 20 new drilling equipments”.
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Move along people... move along..... nothing to see here.... move along.....
If the Argentines agree to this then they'll be in a worse position than when they had Repsol as a majority shareholder.
Maybe they'll agree and just hope the increase in production will generate enough tax revenue to compensate.
NB What's to stop the illustrious Argentines from simply passing another law once the deal is struck?
I predict the Americans will all walk away in the end.
Walk away America and let her stew in her own caused problems.
Plus on the Arg Ambassador, people can't stand him they think his is stupid and/or crazy or both nobody is going to make a deal with him.
There was a story earlier in the week that YPF was going to build a new refinery for U$7B,how? Where does the U$ come from? Equipment? etc etc etc.
Liars and Losers.
i think CFK will be fuming over these demands and will have to look else where for the investment. We are alreayd seeing mining compnaies (Canadian and US) here in SA beggining to shelve projects as they do not believe Argentine is a positive buisness environment. Word of this will get to the oil compnaies who will not be intrested.
You should be grateful, their ambassador to you is stupid and unobtrusive, so you can just ignore him.
Ours neatly does the double, of stupid and inappropriately intrusive.
I'm sure if we didn't have a collectively odd sense of humour then we'd PNG her out of the country rather than laugh at her and her ambush diplomacy...
Love it!
Although I don’t like to defend CFK, her theft of approx US$10 billion worth of Repsol is not too dissimilar to Obama’s daylight mugging of BP shareholders to the tune of US$20 billion. Admittedly BP’s error was highly visible, but Obama’s confiscation of funds was more than double the cost of cleanup/compensation. His kicking of a foreign company was as much for domestic voter consumption as CFKs requisition of Repsol.
However, oil companies will only invest if the projected profits are greater than the exposed risk. With the current Argentine government there is a risk that investors would put up the capital (like all projects of this kind the riskest time is at the begining) for the Argentine government to then sieze the companies assets or with investment in YPF refuse to pay any dividens or profits back to investors and instead use these to reinvest. This is ok if the companies view this reinvestment as a long term stradegy but the falling economy in Argentina a long perioid of time means much much larger risks and so the profits have to be much much larger to compensate. In the short term I do not belive they will get the investment they need. in the long term I see the USA and Europe using politcal pressure to try and get the people to install a pro US/European regime which will be friendly to buisness.
“There is also abundant information on opportunities to develop alternative energies in Argentina”
Excellent
#6 Well she's Presidential material (if you mean Castro), don't know about Arguello, maybe he might be FM (wasn't Timmerman the US Ambassador?)
#7 You really are an unpleasant little man
#9 That was one of the few times I felt like defending the USA, against the ridiculous right wing Obama bashing in parts of the British media which was effectively pro-oilspill!
Just your standard bullshit Argentine propaganda that feeds the ignorant masses.
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