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Substantial New Investments By Repsol YPF in Refineries in Argentina, an Industrialinfo.Com News Alert

Posted on: Tuesday, 10 January 2006, 09:00 CST

Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas) Repsol YPF is an international oil and gas corporation that functions in 28 countries and is the leading oil company in Spain and Argentina. It is one of the ten largest privately held petroleum companies in the world and the most active and largest privately held energy company in Latin America. Repsol YPF has already made important long-term investments in Argentina, and it is planning to increase them in the following years.

Antonio Brufau, Repsol YPF's president, announced that the company would increase its investments in Argentina by up to $700 million, for a total investment of $6.7 billion between 2005 and 2009. This will exceed total investments between 2001 and 2005 by 32%. Between 2006 and 2009, Repsol YPF will invest $90 million per year in exploration. With respect to refining and commercialization, it will invest $180 million in 2005 and $400 million in 2006. Brufau stated that this increase in Repsol YPF investments is due to Argentina's significant economic progress.

Most of the new investment will be devoted to hydrocarbon exploration and production, and this comes at a time when Argentina needs to increase its crude oil reserves. "Argentina is a rich hydrocarbon country but its own government and private companies need to invest in exploration. Otherwise, all companies will have to import crude oil," Repsol YPF's president explained.

According to Julio De Vido, Argentina's Minister of Investment in the Public Sector and Services, Argentina's congress must place a high priority on passing a bill authored last August that provides incentives for high-risk investment in oil exploration (especially offshore).

Previous Investments in Argentina Set the Stage for Current Expansion

During his meeting with Argentina's president, Nestor Kirchner, Brufau gave details about a $1.3 billion investment made in 2005 to improve crude oil, gas production, refining techniques, biodiesel research, and the construction of Repsol YPF's new headquarters in Buenos Aires, Argentina.

In addition to these investments last year, the Spanish-Argentinean oil company has invested $169 million in exploration over the last two years. Forty-three oil wells were completed, which is equivalent to more than 50% of Argentina's existing capacity. Of the investments in exploration, $54 million was spent on onshore petroleum exploration, and $82 million was spent on natural gas exploration in the deep drilling campaign in Cuenca Neuquina (Neuquen, Argentina) with oil wells of 3,000 to 5,000 meters in depth. Also, $33 million was spent on offshore exploration with the first 3D seismic studies in deep Argentinean waters, including the Malvinas basin and the Golfo San Jorge basin.

Brufau also indicated that the recent agreement signed between Repsol YPF and the Venezuelan state owned oil company (PDVSA) regarding crude oil exchange will help Argentina's supply.

Repsol YPF currently has hydrocarbon production of more than 1.1 million barrels of petroleum per day, and its crude and gasoline reserves are located primarily in Latin America and North Africa. In total, Repsol YPF operates nine refineries including five refineries that are located in Spain, one in Peru, and three in Argentina (La Plata (Buenos Aires), Lujan de Cuyo (Mendoza), and Plaza Huincul (Neuquen). Repsol YPF has a total refining capacity of more than 1.2 million barrels per day.

"The three refineries owned by Repsol YPF in Argentina (...) are working at full capacity to meet the increasing fuel demand in the local market," Repsol YPF's president emphasized.

For more energy and industrial news in the Americas check out Industrialinfo.com's Premium Industrial News at www.industrialinfo.com.

Industrial Information Resources (IIR) is a Marketing Information Service company that has been doing business for over 22 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world. For more information, send inquiries to refininggroup@industrialinfo.com or visit us online at www.industrialinfo.com.

Source: Business Wire

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