MercoPress. South Atlantic News Agency

Repsol-YPF to increase investments in Patagonia

Repsol-YPF announced in Buenos Aires that the Spanish-Argentine consortium has plans to invest the equivalent of 750 million US dollars in the coming fiscal year in further exploration and exploitation in the continental shelf of Patagonia.

Before meeting this Thursday with President Nestor Kirchner in Casa Rosada, Repsol-YPF vicepresident Ramon Blanco said the company will maintain and increase investments in Argentina, --given the prospects of a 7% growth of the economy--, and these will be concentrated in "the continental shelf basins of the provinces of Santa Cruz, Tierra del Fuego, Rio Negro and Chubut".

Mr. Blanco and several top officials of the company made the announcement next to Argentine Minister of Federal Planning Julio de Vido, who has been at the centre of the controversy with public utility privatized companies that are strongly lobbying and pressing for an increase in rates, frozen since December 2001.

However in spite of the conciliation message, Mr. Blanco admitted that "the company is working with the government in the assessment of natural gas price and hopefully in the comings weeks we'll reach a definitive agreement concerning prices". Wholesale price of natural gas at the mouth of the well remains frozen in Argentina, (as with public utility rates).

Mr. Blanco said he expected a fair deal, "natural gas for residential consumption must be addressed very carefully as with other public utility rates, targeting an agreement that means efficiency for the companies involved and also helps consolidate the stability that Argentina has managed in the last months". The top official added that "we're not interested in provoking social unrest, but we understand a special system must be set up that contemplates the most modest consumers".

Repsol-Ypf earlier in the week said that the million BTU of natural gas should gradually begin to recover getting back to its 2001 level of 1,30 US dollar instead of the current frozen price of 45 US cents.

As to the open controversy between the Argentine government and the electrical power companies Mr. Blanco was quiet clear, "we don't like public arguing in the press, we'd rather look for converging points that can lead to valid agreements for both parties". Minister De Vido went further and said Repsol-YPF should be taken as an example by other public utilities, "this is the road, investments and not scandalous statements in the media".

This week the Argentine government imposed a 3,3 million US dollar fine on four public utility companies for power and water service disruptions. President Kirchner publicly accused the privatized public utilities of having ceased all investments in 1998 when they concentrated in transferring profits overseas.