Don’t cry for me

23 Mar 2012 By Fiona Maharg-Bravo

Shares in the Spanish oil major have lost more than 10 pct since troubles began in Argentina with its listed subsidiary, YPF. This looks overdone compared to YPF’s own market fall. But Repsol’s exposure to Argentina is bigger than it looks.

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YPF, Argentina’s largest oil and gas company, proposed to distribute last year’s profit in new shares rather than cash and to boost investment to a record 15 billion pesos ($3.4 billion). The Argentinean government rejected the plan as inadequate.
YPF, 57 percent owned by Spain’s Repsol, is under pressure to boost output to reduce the country’s mounting imported fuel bill. Repsol consolidates 100 percent of YPF’s profit, but the only cash it receives from Argentina is the dividend. In a statement, Repsol said the suspension of the cash dividend would not affect its investment plans or dividend policy.

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