Press Esc to close

WorldOil

World Oil News Center



Argentina to create $2-billion oil and gas development fund

BY SHANE ROMIG

BUENOS AIRES -- Argentina' s government plans to put up to $2 billion into a fund that will finance petroleum exploration and production as the South American nation struggles to become self-sufficient in oil and natural gas.

The Argentine Hydrocarbon Fund is authorized to lend money, contribute capital and buy securities issued by oil companies in which the government has an equity stake, according to a resolution published Friday in the government-published Official Bulletin. The government controls energy companies Enarsa and YPF.

It wasn' t immediately clear how President Cristina Kirchner will capitalize the fund.

The central bank, a virtual appendage of the Economy Ministry, is struggling to rebuild its foreign currency stocks even as a bumper soybean harvest brings billions of export dollars into the country.

On Thursday, those reserves, which the government uses to pay its creditors and buy imported fuels like natural gas, slipped to a six-year low of $39.8 billion. Analysts blame the gradual erosion in reserves on the decline in the value of the bank' s gold holdings and persistent capital outflows.

A fire last month that crippled YPF' s largest refinery, which supplies about 30% of Argentina' s domestically produced fuel, will force the state-controlled company to import significantly more diesel and gasoline this year, putting even more pressure on the country' s foreign currency holdings.

Kirchner seized a controlling stake in Argentina' s top oil and gas producer, YPF, from Repsol last year, and has tasked the company with reversing years of declining production that have turned Argentina into a net energy importer. Kirchner accused Repsol of de-capitalizing YPF through an overly generous dividend policy, which left the firm with scant resources to reinvest in its business. Repsol has denied those accusations and is suing her government for roughly $10.5 billion in compensation.

YPF invested $3.23 billion in 2012, an increase of nearly 26% on the year.
The company is also seeking foreign investors to help it develop what are believed to be the world' s third-largest shale gas deposits, which are mainly located in the Patagonian province of Neuquen. Last year, YPF held talks with Statoil, Gazprom and Chevron, among others.

In December, YPF signed a preliminary agreement with Chevron to spend $1 billion to drill 100 wells in Neuquen, and, in a separate deal, agreed to invest $1.5 billion with a company linked to Argentina' s Bulgheroni family.

Dow Jones Newswires

04/19/2013

 

Bookmark and Share


WO DATA HUB

EngineeringTablesIcon-Large

Engineering Data Tables

World Oil's specialized upstream Engineering Data Tables featuring the Drill Bit Classifier, Tubing Tables and more. Get Total Access today.

WO SUPPLEMENTS

2013 Fracturing Technology

2013 Fracturing Technology

MEDIA CENTER

By Digital Publisher

Drill Bit Classifier World Oil published its renowned Drill Bit Classifier in September 2013. The Drill Bit Classifier is a comprehensive listing of major manufacturers' d...

ENERGY EVENTS