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YPF loses arbitration that could cost 1.6bn dollars; stocks plunge 3.6%

Tuesday, May 28th 2013 - 06:10 UTC
Full article 18 comments
YPF was found responsible for rescinding on gas contracts in 2009 YPF was found responsible for rescinding on gas contracts in 2009

YPF the oil company seized by Argentina’s government last year has lost an arbitration case with a Brazilian company that may cost as much as 1.6 billion dollars in indemnity payments. There was an immediate reaction and YPF shares lost the most among Argentina’s major stocks, 3.6%.

The Paris-based International Court of Arbitration found YPF responsible for rescinding on gas-export contracts in 2009 with AES Corp. (AES) Brazilian unit based in Uruguiana and Techint Group and Total SA (FP) unit TGM, YPF said in a note sent to the regulator after the close of trading May 24.

“The ruling is a black cloud on the company’s horizon and triggered the share price fall” said Carlos Aszpis, an equity strategist at Schweber & Cia. Sociedad de Bolsa SA.

Damages could be determined in a separate ruling by the same tribunal, the company said. In 2009, YPF was notified of claims by AES for damages totaling 1 billion dollars while TGM sought 17 million in damages and 366 million in lost profit, according to a YPF filing with the US Securities and Exchange Commission earlier this year.

Including past due interest, the amount would be 1.6 billion, Aszpis said.

The company, based in Buenos Aires, said it would analyze the arbitration ruling and energetically defend shareholders’ interests.

Spain’s Repsol SA is seeking 10.5 billion dollars in compensation from Argentina for the April 2012 nationalization of YPF. Under the previous management, YPF said it was the government not the company that was responsible for stopping gas deliveries.

Top Comments

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  • Biguggy

    Why bother with the courts, the EG's just will not pay, as usual.

    May 28th, 2013 - 06:32 am 0
  • Welsh Wizard

    I wonder whether Chevron had a MAC clause in the doc they recently signed with YPF. If so then YPF might have to wave goodbye to that avenue of funding...

    May 28th, 2013 - 09:23 am 0
  • Captain Poppy

    I believe YPF has to clean an environmental mess in NJ also tallied in the billions. This billion, NJ billions, billions for drilling. mmmmmm....suuuuuure YPF.....sure.

    dirges in the future

    May 28th, 2013 - 09:54 am 0
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