Exclusive: Argentina's YPF says Repsol deal will attract oil investment
By Karina Grazina
BUENOS AIRES (Reuters) - The compensation deal being negotiated between Argentina's YPF (YPFD.BA: Quote) and Spain's Repsol (REP.MC: Quote) will open opportunities for foreign companies to invest in the South American country's untapped oil and natural gas resources, YPF chief Miguel Galuccio told Reuters on Wednesday.
The board of Repsol unanimously agreed on Wednesday to start formal talks with Argentina over a compensation offer for YPF assets that Buenos Aires seized last year.
"Signing a deal between Repsol and the Argentine state will provide the confidence necessary to form new alliances with potential investors and drive non-conventional exploration," Galuccio told Reuters in an interview conducted by email.
Already the world's No. 3 corn and soybean exporter, Argentina stands to become a major oil and gas producer as well if the government can attract the tens of billions of dollars it needs to exploit the Vaca Muerta (Dead Cow) shale formation.
Sources with knowledge of the matter say the preliminary offer to Repsol is worth $5 billion, half the amount the Spanish company initially wanted after Argentina seized its majority stake in YPF last year.
Repsol has hired an international investment bank to help draw up a final deal for the compensation.
Galuccio also said he hopes to enter into an agreement with Mexico's Pemex PEMX.UL to help develop Vaca Muerta shale, which is located in Argentina's southern Patagonia region.
"We would like to develop a multifaceted association with Pemex, which could include participation in Vaca Muerta and the exchange of know-how and technology that could help with non-conventional energy development in Mexico," he said. Continued...