Repsol YPF to Invest US$10.2bn in ABB, Caribbean through '09

Spanish oil company Repsol YPF (NYSE: REP) plans to invest US$10.2bn in its Argentina, Bolivia and Brazil division (ABB) and the Caribbean through 2009 with an emphasis on exploration and liquefied natural gas (LNG) in Venezuela and Trinidad, chairman Antonio Brufau said on Tuesday.

Although ABB will continue to remain the focus of Repsol YPF's capex, most company growth in the next five years will come from North Africa, the Caribbean, the Middle East, the US and West Africa, Brufau said during his presentation of the company's 2005-2009 strategic plan.

Repsol YPF has split its upstream operations into two divisions: ABB covering Argentina, Bolivia and Brazil; and "Upstream," covering the rest of the world including the Caribbean, Brufau said.

Repsol YPF plans to invest US$8bn in ABB in the next five years including 77% in exploration and production, 20% in refining and marketing and 3% in chemicals, Brufau added. The total US$6.16bn investment in E&P includes US$4.1bn in Argentina, US$850mn in Bolivia and US$480mn in Brazil.

Argentina's economy and gas prices are improving steadily, but Repsol YPF's hydrocarbons production is expected to decline 9% by 2009 due to lower oil output. Meanwhile Bolivia's political crisis is holding up investments in that country but as long as it is resolved soon Repsol YPF plans to double hydrocarbons production in that country through 2009, driven by gas demand from neighboring Argentina and Brazil, Brufau said.

In Brazil, Repsol YPF is negotiating with federal energy company Petrobras (NYSE: PBR) to partner on various projects, including a field in the Santos basin. Although hydrocarbons production in ABB is expected to grow at about 1.3% a year through 2009, proved oil and gas reserves in the area are expected to fall 17% to 3.08 billion barrels of oil equivalent (Bboe) in 2009 compared to 2004 due to declines on Argentine fields, Brufau said.

Repsol YPF aims to invest US$2.2bn in the Caribbean through 2009, including 66% in development, 15% in exploration and 19% in LNG plants. Of that investment, US$1.25bn will correspond to Trinidad and the rest to Venezuela.

The company aims to increase hydrocarbons production in the Caribbean to 277,000boe/d by 2009 from 211,000boe/d in 2004.

Globally, Repsol YPF will invest more than 21.1bn euros (US$26.1bn) in its five-year investment plan, the company said in a statement on Tuesday.

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