Bloomberg News

Total Talks With Argentina About Boosting Natural-Gas Output

April 19, 2012

France’s Total SA (FP), Europe’s third- largest oil producer, is in talks with Argentina about increasing natural-gas supplies by more than 5 percent after the country took control of YPF SA in a dispute over crude output.

Ladislas Paszkiewicz, Total’s senior vice president for the Americas, discussed boosting output in the country by 2 million cubic meters a day and expand exploration with YPF in a meeting with government officials in Buenos Aires today, the Planning Ministry said in a statement. YPF and Total will start working on the plan next week, the ministry said.

Argentine President Cristina Fernandez de Kirchner seized control of Buenos Aires-based YPF from Spain’s Repsol YPF SA (YPFD) on April 16, saying the company failed to increase production and investment. The government seeks to curb declining oil output after reserves fell 18 percent between 1998 and 2010, according to data compiled by the Argentine Oil and Gas Institute.

Total is the largest gas producer in Argentina. Production would rise at two fields, called Aguada Pichana and Aguada San Roque, in the province of Neuquen in southwestern Argentina, the ministry said.

The area accounts for about 20 percent of the nation’s gas production. Total holds a stake in the fields and operates them, and YPF is a shareholder together with Pan American Energy LLC, according to the statement. The group met today at YPF’s headquarters.

‘Very Conscious’

Total is committed to boosting output in the South American country to meet increasing demand, Paszkiewicz said last week.

“We want to continue developing, increasing production,” the executive said April 17 during an industry event in Rio de Janeiro. “We’re very conscious of the needs of the country to bring more gas to market.”

Total produced 13.7 billion cubic meters of gas in Argentina last year, or about 37.5 million per day, according to data from the country’s Energy Secretariat. A 2 million cubic meters increase would represent a 5.3 percent boost in the company’s daily gas output.

YPF rose 3.2 percent to 79.50 pesos in Buenos Aires at 4:21 p.m., its first gain since April 12. Total fell 2.6 percent to 36.34 euros at the close in Paris today.

To contact the reporter on this story: Heather Walsh in Bogota at hlwalsh@bloomberg.net Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

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


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