Bernard L. Weinstein, Investor's Business Daily Representatives of Argentina, including President Christina Fernandez de Kirchner and Miguel...
Bernard L. Weinstein, Investor's Business Daily Representatives of Argentina, including President Christina Fernandez de Kirchner and Miguel Galuccio, CEO of the country's largest energy company, YPF, have come to the U.S. seeking $5 billion of direct investment in Argentina's energy sector by American companies. YPF also hopes to raise another $7 billion on Wall Street. But despite Argentina's vast natural resources and abundant on- and offshore reserves ripe for exploration, this won't be an easy sell. In April 2012, the Argentine government announced it was taking back 51% of YPF from Repsol, a Spanish energy company. Repsol has demanded $10.5 billion as compensation for the seizure, a figure the Argentines have rejected. In May, the International Energy Agency (IEA) commented that "Argentina's seizure of YPF may deter investment in the Vaca Muerta (shale) field … Absent foreign-investor guarantees of contract sanctity, the move could deepen Argentina's product import needs in the short- and medium-term. "In the near term," IEA also said, "we expect to see companies commit to new investments to secure their positions with the government. But absent guarantees of stability from the government, producers are unlikely to risk significant investment to develop shale deposits or the employ costly technologies to enhance existing production." Several U.S. energy companies have expressed interest in partnering with YPF. Most notably, Chevron recently signed a memorandum of understanding to help YPF develop the Vaca Muerta. But whether Chevron will commit to a sizable, long-term investment remains to be seen. Read More
