President Cristina Fernández de Kirchner has ordered that all state run entities buy their fuel from Argentina’s largest oil company, YPF.
They must now purchase diesel, petrol and lubricant supplies for cars, boats and planes solely from YPF, and not competitors like ExxonMobil, Petrobras or Shell, the government ordered yesterday.
The YPF decree states that contracts with other companies will be honoured in the meantime but not renewed.
This measure comes right after Tuesday’s meeting where the state-run oil company announced that they will pay out just 5.7% of 2011’s profits, or US$67m, as dividends.
“The change in the dividend distribution policy contrasts with those adopted in recent years, when the payout of profits surpassed 80%,” the company said in a statement Tuesday.
By reducing the payout to shareholders the money can therefore be reinvested back into the company of which the national and provincial governments own 51%.
Chief Executive Officer Miguel Galuccio allocated US$1.3bn of earnings for a new investment fund. The money put into the fund would be a “substantial step toward meeting the goal of ending 2012 with investment of close to US$3.5bn,” YPF claimed on its website.
Investment last year, under the Spanish company Repsol, was US$3.1bn, according to a filing sent to the stock exchange in February.
YPF plans to invest US$7bn a year between 2013 and 2017 in order to boost declining output.
If the company’s five-year plan pans out, output is expected to rise to 216 million barrels of oil equivalent in 2017, from an estimated 159 million this year, according to Market Watch.
The meeting, which lasted for more than six hours, was headed by Galuccio. Repsol representatives attended, since the company still holds a 12% stake, along with Itau bank from Brazil, 3.6% stake, and Inbursa, which holds 8.3%.
Argentina seized 51% of YPF from Repsol in May as President Cristina’s government sought to halt declining oil output and stem fuel imports, which equalled US$9.4bn last year.
The company produces a third of the country’s 570,000 b/d of crude and has a 50-60% share of diesel and petrol sales.
