YPF to Lose 11% of Output as Santa Cruz Revokes Oil Licenses

YPF SA (YPFD), Argentina’s largest energy company, will lose an additional 11 percent of crude production after Santa Cruz province revoked three licenses yesterday, saying the oil producer wasn’t investing enough.

Santa Cruz Governor Daniel Peralta issued a decree ending the oilfield concessions because Buenos Aires-based YPF was “mocking us” with its investment plans, according to a statement on the provincial government website late last night.

YPF has lost at least 15 oil concessions in six provinces since March 13, representing about 16 percent of the company’s output, according to energy secretariat data. Provincial governments started ending licenses after the government of President Cristina Fernandez de Kirchner demanded YPF boost investments and output in an attempt to curb fuel imports.

Newspapers including El Cronista Comercial and Ambito Financiero have reported this week that the Argentine government will announce today the acquisition of a stake of at least 30 percent in YPF, citing sources it didn’t identify.

The concessions Santa Cruz pulled yesterday are Canadon Vasco, Los Perales-Las Mesetas and Pico Truncado-El Cordon. YPF yesterday presented a 5 year-plan to invest $4.4 billion in 11 concessions in Santa Cruz.

To contact the reporter on this story: Rodrigo Orihuela in Rio de Janeiro at rorihuela@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net