Bloomberg News

YPF, Argentina Oil Companies Must Boost Crude Production by 15%

February 27, 2012

Feb. 24 (Bloomberg) -- YPF SA, the largest Argentine oil producer, and other crude and natural-gas companies operating in the country must boost output by at least 15 percent or face losing their licenses.

The Federal Organization of Oil-Producing Provinces agreed to demand companies increase production by that amount in the next two years after a meeting headed by Chubut province Governor Martin Buzzi today. The provinces will confiscate acreage from companies that don’t adhere to the plan, according to a statement on the website of the southern province.

“We are demanding a 15 percent increase in production,” Buzzi said in today’s meeting in Buenos Aires, according to the statement. “If the operators don’t adhere to that, we will have no problem whatsoever in taking over the areas.”

President Cristina Fernandez de Kirchner on Jan. 25 urged oil companies to step up investment after imports of fuels more than doubled in 2011 from a year earlier to $9.4 billion. The government on Feb. 16 threatened “vigorous measures” against Buenos Aires-based YPF if it fails to meet domestic demand.

YPF, the unit of Repsol YPF SA based in Buenos Aires, was mentioned by Buzzi as one of the companies not meeting the government’s investment targets, according to the statement, which didn’t name others. Pan American Energy LLC, Tecpetrol SA and Astra Compania de Argentina de Petroleo SA are meeting goals, the province said.

--With assistance from Silvia Martinez in Buenos Aires. Editor: Dale Crofts, Will Wade

To contact the reporter on this story: Laura Price in Buenos Aires at lprice3@bloomberg.net

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


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