Oilfield Argy-Bargy

5 April 2012 By Kevin Allison

If President Cristina Fernandez makes a grab for the country’s oil group, it’s unclear how she would reimburse majority owner Repsol. But even if the state managed to fork out a “fair” price, the cost of scaring off foreign investors would exceed any gain from nationalisation.

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Shares of YPF, Argentina’s biggest oil company, fell 17 percent on April 3 as fears of a government takeover mounted.
The country’s president, Cristina Fernandez, has repeatedly criticised YPF, which is 57 percent owned by Repsol, the Spanish oil major, for not doing enough to boost domestic oil production.
YPF’s shares have fallen by a third since late January following persistent nationalisation fears and moves by a number of Argentine provinces to strip the group of oil concessions.
The most recent slide came after Pagina 12, a local newspaper seen as reflecting the government’s thinking, said Fernandez had made up her mind on the need for state control of the company.
The government pressure comes as Argentina’s rising fuel import bill has contributed to a shrinking trade surplus in the country, which has yet to return to international debt markets following its 2001 default.
Many of Argentina’s established oil fields are mature. But the recently discovered Vaca Muerta field, a large shale deposit in Argentina’s Neuquen province, is thought to contain resources equivalent to 23 billion barrels of oil - enough to double the country’s oil and gas output over the next decade.

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