MercoPress. South Atlantic News Agency

Argentina and Spain agree to a working group to help resolve YPF ‘differences’

Industry minister Jose Manuel Soria spent two days in Buenos Aires on an unreported visit

Spain and Argentina formed a working group to resolve their “differences” over YPF, the Argentine oil company majority-owned by Madrid-based Repsol-YPF, Industry Minister Jose Manuel Soria said.

“Differences have arisen in recent weeks,” Soria told reporters in Madrid on Thursday. “Whatever difference there is we can deal with it through meetings.”

Soria was in Buenos Aires Tuesday and Wednesday and met with his counterpart in the Argentine government “to try and calm tensions” according to one of his aides.

YPF plunged 15% in Buenos Aires trading on Wednesday on reports the government is planning to take it over. However they recovered 13% on Thursday after President Cristina Fernandez made no mention to further measures regarding YPF during her state of the nation address to Congress.

The Argentine government this month threatened to take “most vigorous measures” against YPF if it fails to meet domestic fuel demand and does not invest what it promised. It also encouraged rumours anticipating the re-nationalization of the oil corporation.

The administration of Cristina Fernandez has targeted oil companies as part of a wider drive to push big energy companies to boost oil and natural gas output as fuel imports soar. The Argentine government claims the companies have not reinvested sufficiently and therefore the supply crunch, which has turned the country from a net exporter a decade ago to an increasing importer of different fuels.

Since her landslide re-election in October, Cristina Fernandez’s government has tightened controls on the foreign exchange market, raised restrictions on imports and ordered some companies to bring their export revenue to the country after capital outflows accelerated to a record high in the third quarter and the trade surplus narrowed.

Repsol, headed by Chairman Antonio Brufau, owns 57% of YPF while Petersen Energia SA, controlled by YPF Chief Executive Officer Sebastian Eskenazi’s family, owns 25%.