Venezuela’s Chavez Threatens Repsol Over YPF Arbitration
Venezuela President Hugo Chavez warned Repsol SA (REP) to “think carefully” about taking action against Argentina after it nationalized its YPF SA (YPFD) unit, indicating the Spanish company may face ramifications in the South American country.
“They have a lot of investment here in Venezuela,” Chavez said yesterday on state television after meeting with Argentine Planning Minister Julio De Vido in Caracas. “What happens there in Argentina affects what happens here.”
Repsol should try to reach a “friendly” agreement with Argentina for compensation, Chavez said, adding that YPF, Argentina’s largest oil producer, may be given mature oil blocks to explore in Venezuela’s Orinoco oil belt. Venezuela wants to export more oil to Argentina, which spent $11 billion on fuel imports last year, and help the country develop its offshore natural-gas industry, said Chavez.
Kristian Rix, a Madrid-based spokesman for Repsol, said today in a telephone interview that the company wasn’t able to comment on what Chavez said.
Repsol has a stake in the Carabobo 1 oil field in Venezuela’s Orinoco belt and operates with Italy’s Eni SpA (ENI) the Perla field, estimated to hold 17 trillion cubic feet of gas.
After the April expropriation of a 51 percent stake of its YPF unit in Argentina, Repsol said it’s seeking $10.5 billion in compensation. The company filed an arbitration request at the World Bank’s International Centre for Settlement of Investment Disputes over the seizure of its YPF unit, De Vido said the seizure of its YPF unit in Argentina in April, De Vido said in an interview with Venezuelan state television in May.
Argentina faces more cases at the ICSID, as the Washington- based arbitration court is known, than any other country.
Argentine authorities haven’t responded to a letter sent from Repsol seeking formal negotiations, Chairman Antonio Brufau said in May.
“I’d love to believe that there was a willingness to talk and negotiate, but I’ve not seen that up to now,” Brufau said in a May 29 conference call.
Repsol fell 7.2 percent today to 10.96 euros in Madrid, the lowest price since Oct. 30, 2002.
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