YPF Joins Oil Industry Budget Cuts as Argentine Subsidy Shrinks

(Bloomberg) -- YPF SA, the Argentine state-run oil producer, joined the global oil industry’s drive to cut capital spending as domestic prices kept artificially high by the government failed to shield the company from a global downturn.

The producer said it invested 61.2 billion pesos ($4 billion) last year. That’s 33 percent less than the $6 billion of investment pledged last year. It reported the first quarterly loss in at least a decade.

The higher domestic crude prices were introduced by former President Cristina Fernandez de Kirchner’s government to shield YPF, which was nationalized in 2012, from the market rout. The country’s Medanito crude was set at $77 a barrel in September, compared with an average $44.69 for Brent, the international benchmark, during the fourth quarter.

The fourth-quarter net loss was 1.7 billion pesos, or 4.32 pesos a share, compared with a profit of 1.4 billion pesos, or 3.52 pesos, a year earlier, YPF said Thursday in a statement after markets closed.

The company’s oil and gas production increased 3 percent to 576,700 barrels of oil equivalent a day last year.

(The company’s management will hold a conference call with investors to discuss results Friday at 8:30 New York time.)

Copyright 2016 Bloomberg News.

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