(This article was originally published Thursday.)
BUENOS AIRES -(Dow Jones)- Just as speculation about the future of the oil company YPF SA (YPFD.BA) reached a fever pitch Thursday, Argentine President Cristina Kirchner ignored the issue entirely in a highly anticipated speech and spoke instead about chocolate and beef exports.
Investors, economists and politicians had waited all day for the speech after media reports this week indicated Kirchner would reveal plans to at least partially nationalize YPF.
Kirchner’s cabinet chief had previously said all options are on the table and that the government might nationalize the company in a dispute over investment in production.
But Kirchner, who is famous for leaving observers jaw-dropped with surprise announcements, left some people confused by opening her speech with a box of chocolates in her hands.
«These are chocolates that we’ve started producing again in Argentina,» said the president, whose administration has been pushing companies to stop importing goods and produce them here. «I’m not planning to share these chocolates with you.»
The words, delivered with a broad smile, led to cheers and repeated applause from loyalists in the audience.
But the president’s speech seemed deeply disconnected from the broader expectations that she would provide details about the most important business and economic issue of the day: the possible nationalization of YPF.
Executives from YPF’s parent company, Spain’s Repsol YPF SA (REP.MC), were in town to meet with government officials and strategize over how to handle a possible announcement.
The government blames YPF for declining oil and gas output that has led Argentina to become a net energy importer.
Last year falling output, coupled with rising demand, led Argentina to double its fuel import bill to $9.4 billion.
Industry officials say it’s actually government policies, including price caps and constantly changing rules, that discourage investment in exploration and production.
Kirchner’s speech, in which she also announced plans to lower some beef export taxes, came as the government appears to be studying at least five differing plans for gaining control over YPF. People familiar with the plans say there is significant disagreement within the government about how to proceed. All options could lead to negative consequences, such as international lawsuits and frayed relations with Spain.
«I think the government’s internal problems are very big and that may partly explain the president’s silence,» said Carlos Pierro, an energy analyst and former YPF president.
Pierro also said Kirchner may not have felt comfortable detailing YPF’s future just before an upcoming Summit of the America’s meeting in Cartagena this weekend.
At the meeting Kirchner will meet with other leaders from the region, including the president of Mexico, whose state-run oil company, Petroleos Mexicanos (PEM.YY), or Pemex, has a stake in Repsol. In February, the two companies signed a 10-year strategic industrial alliance.
A spokesman for Kirchner could not be reached for comment.
Whatever the case, Kirchner’s silence, intentional or not, seems set to further fuel speculation about YPF, whose share prices have swung tremendously in recent weeks.
In Buenos Aires, YPF surged 7% to 122.50 pesos ($27.90) Thursday, while its American depositary shares in New York closed 8.6% higher at $22.93. YPF’s stock appeared to rally on receding fears of a full-blown nationalization.
A Planning Ministry spokesman said Thursday government officials met earlier in the day with provincial governors to discuss YPF’s future but did not reach any conclusions.
Copyright © 2012 Dow Jones Newswires
BUENOS AIRES -(Dow Jones)- Just as speculation about the future of the oil company YPF SA (YPFD.BA) reached a fever pitch Thursday, Argentine President Cristina Kirchner ignored the issue entirely in a highly anticipated speech and spoke instead about chocolate and beef exports.
Investors, economists and politicians had waited all day for the speech after media reports this week indicated Kirchner would reveal plans to at least partially nationalize YPF.
Kirchner’s cabinet chief had previously said all options are on the table and that the government might nationalize the company in a dispute over investment in production.
But Kirchner, who is famous for leaving observers jaw-dropped with surprise announcements, left some people confused by opening her speech with a box of chocolates in her hands.
«These are chocolates that we’ve started producing again in Argentina,» said the president, whose administration has been pushing companies to stop importing goods and produce them here. «I’m not planning to share these chocolates with you.»
The words, delivered with a broad smile, led to cheers and repeated applause from loyalists in the audience.
But the president’s speech seemed deeply disconnected from the broader expectations that she would provide details about the most important business and economic issue of the day: the possible nationalization of YPF.
Executives from YPF’s parent company, Spain’s Repsol YPF SA (REP.MC), were in town to meet with government officials and strategize over how to handle a possible announcement.
The government blames YPF for declining oil and gas output that has led Argentina to become a net energy importer.
Last year falling output, coupled with rising demand, led Argentina to double its fuel import bill to $9.4 billion.
Industry officials say it’s actually government policies, including price caps and constantly changing rules, that discourage investment in exploration and production.
Kirchner’s speech, in which she also announced plans to lower some beef export taxes, came as the government appears to be studying at least five differing plans for gaining control over YPF. People familiar with the plans say there is significant disagreement within the government about how to proceed. All options could lead to negative consequences, such as international lawsuits and frayed relations with Spain.
«I think the government’s internal problems are very big and that may partly explain the president’s silence,» said Carlos Pierro, an energy analyst and former YPF president.
Pierro also said Kirchner may not have felt comfortable detailing YPF’s future just before an upcoming Summit of the America’s meeting in Cartagena this weekend.
At the meeting Kirchner will meet with other leaders from the region, including the president of Mexico, whose state-run oil company, Petroleos Mexicanos (PEM.YY), or Pemex, has a stake in Repsol. In February, the two companies signed a 10-year strategic industrial alliance.
A spokesman for Kirchner could not be reached for comment.
Whatever the case, Kirchner’s silence, intentional or not, seems set to further fuel speculation about YPF, whose share prices have swung tremendously in recent weeks.
In Buenos Aires, YPF surged 7% to 122.50 pesos ($27.90) Thursday, while its American depositary shares in New York closed 8.6% higher at $22.93. YPF’s stock appeared to rally on receding fears of a full-blown nationalization.
A Planning Ministry spokesman said Thursday government officials met earlier in the day with provincial governors to discuss YPF’s future but did not reach any conclusions.
Copyright © 2012 Dow Jones Newswires
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¡Ooooooóóssssooo…!
Que la sigan fumando.