YPF Tumbles on Risk of Losing Most Productive Oil Field

YPF SA, Argentina’s largest oil producer, plummeted to the lowest in two years in Buenos Aires trading after Chubut province said it plans to revoke the company’s most productive field.

The stock fell 16 percent to 123.7 pesos at the close of trading, the lowest price since July 1, 2009. YPF’s American depositary receipts dropped 15 percent in New York yesterday when Argentine markets were closed, and retreated an additional 3.6 percent today.

YPF has lost 12 licenses to operate oil fields in five Argentine provinces since March 14 after President Cristina Fernandez de Kirchner’s government demanded higher investment to curb output declines and halt growing imports. The Manantiales Behr field, which produced about 10 percent of Buenos Aires-based YPF’s oil last year, is among four more licenses the Patagonian province of Chubut plans to revoke.

“The sentiment is clearly moving toward stronger government intervention in YPF,” Walter Chiarvesio, a Buenos Aires-based analyst at Banco Santander SA, wrote in a research note today.

The government may send a bill to congress this week proposing the purchase of a 51 percent stake in YPF, Buenos Aires-based newspaper Clarin reported today, without saying where it got the information.

Argentina’s Congress may take up legislation on YPF in coming days, Buenos Aires-based La Nacion said, citing people in the legislature it didn’t identify.

YPF’s workers would reject the nationalization of the company because the government doesn’t have the money to invest in new fields, newspaper La Prensa de Neuquen said, citing union leader Guillermo Pereyra.

Manantiales Field

Chubut decided to end four more concessions because of YPF’s failure to comply with contracts, Governor Martin Buzzi said in a March 31 statement on the government’s website.

Manantiales Behr produced about 1.09 million cubic meters of oil in 2011, compared with YPF’s total crude output of 11.25 million cubic meters, according to data from the Energy Secretariat. Prior to March 14, YPF, which accounts for about 30 percent of Argentina’s crude output, held 104 licenses in the country, the data show.

Argentine oil licenses are assigned by provincial governments and divided into one or more fields.

YPF on March 28 filed a lawsuit with the Supreme Court against Chubut for having revoked two licenses, according to a company official who couldn’t be identified because the lawsuit hadn’t yet been announced publicly. The province has taken away the most productive fields from YPF.

Shale Oil

Neuquen province announced March 30 that it would withdraw the Don Ruiz license after having ended two licenses earlier last month. Don Ruiz, an area of 109 square kilometers (42.1 square miles), has the potential to produce shale oil because it sits on the Vaca Muerta formation, according to the Neuquen government.

Carlos Bulgheroni, the billionaire owner of Pan American Energy LLC, traveled to Spain between March 21 and March 24 to discuss buying a stake in YPF with Spanish government officials and Repsol YPF SA executives, Madrid newspaper El Tiempo reported yesterday, citing people it didn’t identify.

YPF is controlled by Repsol with a 57.4 percent stake. Argentina’s Eskenazi family owns 25.5 percent and operates the company. The government has a 0.2 percent stake and holds a so-called golden share, which entitles it to block certain decisions, such as takeovers.

Repsol fell 2.9 percent to 18.26 euros in Madrid today. The stock has declined 23 percent this year.

Repsol spokesman Kristian Rix, based in Madrid, declined to comment on the speculation that the Argentine government or Bulgheroni may buy a stake in YPF.

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