Argentina wants Brazil to double Petrobras's presence

04/21/2012 - 09h27

Argentina's Minister of Planning Julio De Vido, appointed by President Cristina Kirchner to be oil company YPF's intervener, submitted yesterday a proposal to the Brazilian government to double Petrobras's participation - from 8% to 15% - in the market of oil production, processing and distribution in Argentina.

Brazil agreed to look into increasing its investments. In consideration, however, it asked legal certainty to prevent Petrobras from suffering a problem similar to that of Spain's Repsol. Repsol has been under the Argentine government intervention since Monday and a bill to expropriate it is going through legislative proceeding at Congress.

"Our intention is to invest as much as we can in Argentina, either because it is good business for Petrobras, or because it is in Argentina's interest," Brazil's Mines and Energy Minister, Edison Lobão, who received De Vido in Brasília, said yesterday.

Both met Dilma Rousseff in her office yesterday evening. Earlier that day, De Vido had met Graça Foster, president of Petrobras.

Lobão said the government will do "everything it can" to increase its investments in Argentina. Brazil invested US$ 500 million (R$ 940 million) in 2011, the same projection for 2012. Lobão did not say how much Brazil would have to invest to meet Argentina's proposal.

Lobão reaffirmed that the recent renationalization of YPF does not harm Petrobras's relations in Argentina.

"We trust our relations with Argentina. They are solid."

Lobão was questioned whether there are any chances that Argentina might put Petrobras's activities at risk. He said: "How could that risk exist, if Argentina is requesting Petrobras to increase its activities there?"

De Vido said Argentina wants to develop closer relations with Petrobras and that Petrobras will be a model for YPF, as Brazil's oil company is first in Latin America.

"YPF will be a publicly traded company controlled by the State, like Petrobras. The president of Argentina mentioned Petrobras as an example," said De Vido.

He denied intentions of inviting Petrobras to occupy Repsol's place in the partnership with YPF, but said Argentina intends to do "business together."

De Vido said he will now talk about investment with the U.S.'s Chevron and Exxon, as well as Sinopec, of China.

Asked about the cancelation of the exploration concession of Petrobras's well in Neuquén, Southern Argentina, De Vido said the negotiations with local authorities to undo the cancelation are at an advanced stage.

"We talked this morning [yesterday] with the governor, and negotiations are well underway," he said.

Translated by THOMAS MUELLO