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Weekly Report - 22 March 2012 (WR-12-12)

ARGENTINA: YPF on the ropes

YPF, the Argentine subsidiary of the Spanish oil giant Repsol, has been stripped of six concessions in three Patagonian provinces over the past week, and a further three are considering similar action. This has increased fears that the government of President Cristina Fernández is preparing either to take over the company and allow for private-public ownership, like Brazil's Petrobras, or simply re-nationalise it. The fact that YPF used to be the government’s poster-child for an Argentine company – YPF is administered by the 25% stakeholder Grupo Petersen of the Eskenazi family – that was exploring and investing in the country [WR-11-50] has made other ‘less loved’ operators extremely uneasy. The decision to rescind contracts due to low investment and decreasing productivity could have the opposite effect to the one desired, especially since the provincial companies that will now exploit the fields lack the necessary funds to invest in them either.

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