MercoPress. South Atlantic News Agency

Argentine government entities can only buy fuel from YPF

Government staff must fly on business only with Aerolineas Argentinas

Argentina's state entities must purchase diesel, gasoline and lubricant supplies for cars, boats and planes solely from YPF, the recently nationalized oil company, and not competitors like ExxonMobil, Petrobras or Shell, the government ordered Thursday.

Argentine President Cristina Fernandez announced the measure in a decree published in the Official Bulletin, part of a battery of related orders.

The others include requirements for state workers to only fly on business with the state airline Aerolineas Argentinas and to receive their salaries through Banco de la Nacion Argentina, a state bank run by the national government.

Economy Minister Hernan Lorenzino and Cabinet Chief Juan Manuel Abal Medina will provide further details on these and related measures next week according to Argentine press reports.

The YPF decree states that contracts in place for fuel purchases from competitors will be respected until termination, but not renewed.

YPF, which came under state control in May through the seizure of 51% of the shares from Spain's Repsol, plans to invest more than 35 billion dollars through 2017 to turn around sagging oil, natural gas and refined goods production by squeezing more out of mature fields, boosting refinery output and developing shale resources.

YPF has said it wants to finance much of the spending through cash flow from its operations, including on the sale of petroleum goods.

The company produces a third of the country's 570.000 b/d of crude and 23% of the 120 million cu m/d of gas and has a 50-60% share of diesel and gasoline sales.

Its competitors in diesel and gasoline sales include ExxonMobil, Petrobras, Shell and Oil M&S.