Argentina rebuffs Spain in YPF dispute March 2, 2012 4:42 pm
By Jude Webber in Buenos Aires and Miles Johnson in Madrid
Argentina has bluntly told Madrid not to meddle in YPF, its biggest company and former oil monopoly, even though it is controlled by Spain’s Repsol.
In what was being seen in Madrid as an embarrassing slap in the face after intense diplomatic pressure, including from King Juan Carlos of Spain, to avert state intervention in the company, Argentina also denied it had agreed to create working groups to thrash out differences over YPF.
José Manuel Soria, Spain’s industry minister, told reporters on Thursday that officials had agreed to such a move at a meeting in Buenos Aires, where he made a whirlwind trip this week to defuse tensions as expectations grew that the Argentine government was poised to seek to exert greater influence over, or even nationalise, YPF. The Spanish ministry of industry declined to comment on the apparent snub by Buenos Aires, which risks damaging relations between the two countries.
People briefed on the situation said Mr Soria had been assured in private by Argentine officials earlier in the week that the measures he spoke about publicly on Thursday would be followed.
But Argentina’s economy and planning ministers said in a joint statement that they “deny the existence or integration of any technical joint working group with the Spanish government on issues relating to Repsol-YPF”.
Moreover, they added: “In no way do issues relating to Repsol-YPF form part of the bilateral agenda between Spain and Argentina. Such issues are of a strictly internal nature in Argentina and therefore are subject exclusively to the Argentine republic’s regulatory framework, legislation and political decisions.”
Cristina Fernández, Argentina’s president, has excoriated YPF for what she says is a failure to reinvest profits to reverse a “vertiginous” decline in production since 1999. That has led to soaring oil imports, which she says wiped $5bn off the trade surplus last year.
Ms Fernández did not, as expected, use a speech to Congress on Thursday to make announcements about YPF, but sources close to the company and analysts said they did not think the government had had a change of heart.
Indeed, plans to change central bank rules to be able to tap reserves in full could provide a way for the government to fund greater influence in the company, possibly by buying some of YPF’s 17.09 per cent free float, said Emilio Apud, a former energy secretary.
He said that Argentina’s plans for YPF looked to be “on hold while there is a period of negotiation with Spain”. Repsol owns 57.43 per cent of YPF; the Petersen Group, an Argentine investor, holds 25.46 per cent and the Argentine state has a golden share.
YPF nevertheless faces continued pressure. Martín Buzzi, governor of the oil-producing province of Chubut, gave YPF a week to spell out investment plans or face losing concessions.
Politicians in Madrid are sensitive about stability within companies considered strategically important after Pemex, Mexico’s state oil group, teamed up with another investor in Repsol last year to exert more control over the Spanish group. Pemex later repaired relations with Repsol’s management in a process overseen by the governments of Spain and Mexico. |
