Argentina seeks Petrobras role in YPF

Hector Velasco
AFP News21 April 2012
Pie-charts showing ownership of oil company Repsol-YPF before and after expropriation by Argentina

Argentina urged Brazil's state-owned oil giant Petrobras to increase investment and collaborate further with oil company YPF, which Buenos Aires announced it would seize.

"We are not asking Petrobras to replace (Repsol) but we would like it to increase its participation" in areas of Argentina, Argentine Planning Minister Julio de Vido told a news conference in the Brazilian capital, on Friday.

Brazilian Energy Minister Edison Lobao responded after the pair met that Petrobras would invest $500 million this year in Argentina, roughly the same amount as last year.

But he said Petrobras would "invest as much as it could" in its neighbor.

The men held talks with Petrobras chief executive Maria das Gracas Silva Foster amid intense international concern over Argentina's decision to nationalize its biggest oil firm, YPF, and the potential for additional economic actions in the South American nation.

In reprisal, Spain approved import limits on multi-million dollar imports of Argentine biodiesel, giving preference to domestic or European biofuel.

But Argentine President Cristina Kirchner brushed off the retaliatory move. "If the government of Spain wants to pay more for biodiesel, that is their sovereign decision," she said.

Speaking in Washington, Spanish Economy Minister Luis de Guindos said most G20 economic ministers support his country's outrage over the expropriation of YPF from Spain's Repsol.

"I can say that the general feeling is one of support for the Spanish government, which considers the measures or the position taken by the Argentine government to be negative from the standpoint of what is legally secure and what must be predictability in flows of investment," De Guindos said.

The minister said his government would use "every legal means within its reach" to stop the takeover.

His Argentine counterpart Hernan Lorenzino fired back by denying that the G20 major economies were siding with Spain on the move.

"It has not been in the past and is not now a topic under discussion at the G20" meeting, Lorenzino told reporters.

Amid international shockwaves over the nationalization, the European Parliament condemned the action and urged the European Union to consider retaliatory measures.

Ana Paula Zacarias, head of the EU mission in Brasilia, warned that the nationalization of YPF might interfere with negotiations on a free trade agreement between Latin America's Mercosur nations and Europe.

World Bank chief Robert Zoellick criticized Argentina on Thursday and the United States has also sided with Spain.

Chile, Peru and Mexico warned of possible consequences on regional investments.

But Uruguayan Energy Minister Roberto Kreimerman said the nationalization of Repsol YPF was unlikely to affect foreign investment in his country.