Standard & Poor's has put a "negative watch" on Argentina's credit rating, citing "rising restrictions to international trade" and "steps to nationalise oil company YPF" as reasons for the move.
Despite affirming its "B" credit rating, S&P added that the South American country's recent actions "could exacerbate existing weaknesses in the economy", pointing to high inflation and increasingly rigid government expenditure.
The news came after Spain’s Repsol threatened legal action against any company that attempts to invest in YPF following its expropriation by Argentina last week, as the government expressed determination to “pay nothing at all” in compensation to the Spanish oil company.
The move would discourage external partners from providing the investment YPF needs to exploit vast shale oil deposits discovered within the Latin American country and is the latest attempt by Repsol to fight back against the illegal seizure of its subsidiary.
“We reserve the right to take legal action against any party investing in the YPF and its assets following the unlawful expropriation of the company,” Kristian Rix, a spokesman for Repsol in Madrid, told the Daily Telegraph on Monday.
The Spanish energy company believes billions of dollars are required to develop Argentina’s prospects including at least €25bn a year over the next decade to exploit the Vaca Muerta shale discovery made last year.
Julio De Vido, Argentina’s Planning Minister has already approached Brazil's state-run oil company Pertobras over investment in YPF and plans to contact other foreign oil companies including Exxon, Chevron and ConocoPhilips.
The development comes amid yet more rhetoric from Argentina as government sources insisted the offer of compensation would be “zero pesos”.
Shares in Repsol and Spanish builder Sacyr Vallehermoso, which owns a 10pc stake in the company, fell by 4.7pc and 10.7pc respectively on Monday after government sources quoted in Argentina’s daily newspaper La Nacion said the government was “determined to pay nothing at all to Repsol”.
Antonio Brufau, CEO of Repsol has argued that its YPF stake had a value of $10.5bn. “They are looking into and finding out everything on the management of Repsol: irregularities, lack of investment, defective technical plans, financial and accounting issues. There is a debt of $9bn,” an unnamed official told the newspaper.
The government is assuming that any legal action processed through international tribunals could take five or six years, confided the source.
Meanwhile, details of the aggressive tactics employed by the government of Cristina Fernandez de Kirchner towards Spanish executives at YPF during the takeover emerged in a briefing issued by Spain’s foreign office to all its embassies fermenting hostilities between the two countries.
Mr de Vido and Axel Kicillof, the deputy economy minister, arrived at company headquarters with armed security guards who used “physical violence and threats” to force Spanish YPF employees from the building giving them five minutes to collect their personal belongings, the internal memo said.
Spanish YPF executives were then “hunted down” for “harsh interrogation” and they and their families sought refuge at the home of a senior executive awaiting repatriation to Spain. In addition, eyebrows were raised over the state appointment of one of new managers of YPF.
Exequiel Espinosa, the head of state oil company Enarsa, was once embroiled in a corruption scandal that threatened to derail Mrs Kirchner’s campaign for presidency in 2007.
Mr Espinosa was one of the Argentine officials on board a plane carrying Guido Antonini, a Venezuelan businessman who was caught landing in Buenos Aires with a suitcase of $800,000 allegedly destined for Mrs Kirchner’s campaign.
The matter forced the resignation of Claudio Uberti, an Argentine government official involved in trade and investment deals with Venezuela and cost Diego Uzcategui, president of Venezuela oil company PDVSA as both were on board the plane.
But Mr Espinosa, who was also one of the eight passengers on the private jet hired by Enarsa, survived the association unscathed.
“He’s a complete Kichnerista crony and now he’s in charge of exploration and production at YPF,” said a source connected to the Latin American energy industry.
Repsol may fight a move by the Eskenazi family to buy back shares in YPF citing a “force majeure” argument to declare the agreement void.
The company could argue that the agreement to buy back Eskenazi shares in the event that Repsol was to lose its majority stake was not applicable in the context of expropriation.
It also emerged on Monday that Argentine officials had searched a property used by Mr Braufau in Buenos Aires, seizing computers and documents apparently without an official court order.
telegraph.co.uk
Despite affirming its "B" credit rating, S&P added that the South American country's recent actions "could exacerbate existing weaknesses in the economy", pointing to high inflation and increasingly rigid government expenditure.
The news came after Spain’s Repsol threatened legal action against any company that attempts to invest in YPF following its expropriation by Argentina last week, as the government expressed determination to “pay nothing at all” in compensation to the Spanish oil company.
The move would discourage external partners from providing the investment YPF needs to exploit vast shale oil deposits discovered within the Latin American country and is the latest attempt by Repsol to fight back against the illegal seizure of its subsidiary.
“We reserve the right to take legal action against any party investing in the YPF and its assets following the unlawful expropriation of the company,” Kristian Rix, a spokesman for Repsol in Madrid, told the Daily Telegraph on Monday.
The Spanish energy company believes billions of dollars are required to develop Argentina’s prospects including at least €25bn a year over the next decade to exploit the Vaca Muerta shale discovery made last year.
Julio De Vido, Argentina’s Planning Minister has already approached Brazil's state-run oil company Pertobras over investment in YPF and plans to contact other foreign oil companies including Exxon, Chevron and ConocoPhilips.
The development comes amid yet more rhetoric from Argentina as government sources insisted the offer of compensation would be “zero pesos”.
Shares in Repsol and Spanish builder Sacyr Vallehermoso, which owns a 10pc stake in the company, fell by 4.7pc and 10.7pc respectively on Monday after government sources quoted in Argentina’s daily newspaper La Nacion said the government was “determined to pay nothing at all to Repsol”.
Antonio Brufau, CEO of Repsol has argued that its YPF stake had a value of $10.5bn. “They are looking into and finding out everything on the management of Repsol: irregularities, lack of investment, defective technical plans, financial and accounting issues. There is a debt of $9bn,” an unnamed official told the newspaper.
The government is assuming that any legal action processed through international tribunals could take five or six years, confided the source.
Meanwhile, details of the aggressive tactics employed by the government of Cristina Fernandez de Kirchner towards Spanish executives at YPF during the takeover emerged in a briefing issued by Spain’s foreign office to all its embassies fermenting hostilities between the two countries.
Mr de Vido and Axel Kicillof, the deputy economy minister, arrived at company headquarters with armed security guards who used “physical violence and threats” to force Spanish YPF employees from the building giving them five minutes to collect their personal belongings, the internal memo said.
Spanish YPF executives were then “hunted down” for “harsh interrogation” and they and their families sought refuge at the home of a senior executive awaiting repatriation to Spain. In addition, eyebrows were raised over the state appointment of one of new managers of YPF.
Exequiel Espinosa, the head of state oil company Enarsa, was once embroiled in a corruption scandal that threatened to derail Mrs Kirchner’s campaign for presidency in 2007.
Mr Espinosa was one of the Argentine officials on board a plane carrying Guido Antonini, a Venezuelan businessman who was caught landing in Buenos Aires with a suitcase of $800,000 allegedly destined for Mrs Kirchner’s campaign.
The matter forced the resignation of Claudio Uberti, an Argentine government official involved in trade and investment deals with Venezuela and cost Diego Uzcategui, president of Venezuela oil company PDVSA as both were on board the plane.
But Mr Espinosa, who was also one of the eight passengers on the private jet hired by Enarsa, survived the association unscathed.
“He’s a complete Kichnerista crony and now he’s in charge of exploration and production at YPF,” said a source connected to the Latin American energy industry.
Repsol may fight a move by the Eskenazi family to buy back shares in YPF citing a “force majeure” argument to declare the agreement void.
The company could argue that the agreement to buy back Eskenazi shares in the event that Repsol was to lose its majority stake was not applicable in the context of expropriation.
It also emerged on Monday that Argentine officials had searched a property used by Mr Braufau in Buenos Aires, seizing computers and documents apparently without an official court order.
telegraph.co.uk
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