MercoPress. South Atlantic News Agency

Repsol continues to cut its holdings in Argentina’s YPF

Nevertheless CEO Antonio Brufau said that Repsol aims to keep at least 51% of YPF

Repsol YPF, (REP) Spain’s biggest oil company, agreed to sell 3.83% in YPF for 639 million US dollars, cutting its holding in the Argentine unit to 76%, and said it plans to sell more shares through a public offering.

The company will sell a 2.9% stake to Lazard Asset Management and 0.93% to other investors for 42.40 USD a share, Madrid-based Repsol said Monday. A further 1.06% stake was sold in the market in the last few months and Repsol plans a public offering of as much as 7.1% of YPF through a sale of American depositary shares.

“The sale of YPF shares is part of Repsol’s strategic goal to rebalance its portfolio of assets” the company said.

Repsol is seeking to reduce business in maturing fields in Argentina while investing in exploration in Brazil’s offshore Santos Basin and elsewhere to increase output. Repsol in 2008 delayed a public offering of a stake in YPF, which produces and processes about 50% of Argentina’s oil and controls about half the domestic fuel market.

Repsol shares fell as much as 2.8% to 22.80 Euros in Madrid. They have climbed 9.9% valuing the company at 28 billion Euros (39 billion USD).

Chief Executive Officer Antonio Brufau said in April last year that Repsol aims to keep at least 51% of YPF. On Dec. 23, the company agreed to sell 3.3% of YPF for 500 million USD to funds advised by Eton Park Capital Management, Capital Guardian Trust Co. and Capital International Inc.

Argentine investor Sebastian Eskenazi, whose family bought 15% of YPF from Repsol for 2.2 billion USD in 2007, also has an option to boost his interest to 25% by 2012.

Repsol’s oil and gas production, excluding YPF, fell 2.3% to 341,000 barrels of oil equivalent a day in the fourth quarter as output at some fields dropped and because of inspections at the Shenzi project in the US Output from Buenos Aires-based YPF fell 2.5% to 511,000 bpd following an oil workers’ strike in southern Argentina.

Repsol forecasts annual production growth of as much as 4% through 2014 as projects in Brazil and Peru start. It plans to invest 28 billion Euros from 2010 to 2014 on fields in Venezuela, Bolivia and Algeria. The company will invest about 6 billion Euros this year and plans to drill 25 to 30 exploration and evaluation wells, Repsol said last month.

The reserve replacement ratio rose to 131% last year, meaning Repsol found more oil than it produced, up from 94% in 2009. The company has estimated a ratio of more than 110% in the next five years.