Repsol Lifts LatAm Hydrocarbons Production 15% in 2003

Spanish oil company Repsol YPF's Latin American hydrocarbons production increased 15% to 1.05 million barrels of oil equivalent a day (mboe/d) compared to 911,900boe/d in 2002, the company said in its 2003 earnings statement.

Argentine hydrocarbons production increased 6.2% in 2003 to 760,100boe/d, with gas production increasing 18% to 328,100boe/d, and crude and liquids production falling 1.3% to 432,000boe/d. However, Argentina's oil and gas production as a percentage of Repsol YPF's global production fell to 67% in 2003, compared to 72% in 2002, in line with the company's strategy to reduce its exposure in that country, chairman and CEO Alfonso Cortina said in a conference call to discuss 2003 results.

Hydrocarbons production in the rest of Latin America increased 47.5% to 289,000boe/d year-on-year. Crude and liquids production rose 21.2% to 97,800boe/d in 2003 and gas production rose 65.9% to 191,200boe/d, the statement said.

Higher production in Trinidad and Tobago, Argentina and Bolivia, as well as the start-up of Ecuador's OCP heavy crude pipeline, increased Repsol YPF's total hydrocarbons production by 19% to 1.14 million boe/d in the fourth quarter, Cortina said.

Higher gas and refining prices in Argentina due to the stronger exchange rate of the peso against the US dollar also helped boost Repsol YPF's Q4 and 2003 results, he said.

Natural gas prices in Argentina increased 23.2% to US$0.85 per million British Thermal Units (mBTU) in 2003 compared to US$0.69/mBTU in 2002, which is still much less than the 2001 pre-devaluation price of US$1.46/mBTU, CFO Luis Manas said in the conference call.

The company increased its gas sales in Argentina 12.1% year-on-year to 2.49 billion cubic meters (bcm) in 2003 due to rising demand in that country. By comparison, gas sales in the rest of Latin America increased 4.8% to 4.45bcm. The gas price in Trinidad and Tobago also had a positive impact, rising by 35% year-on-year, with the high margin on liquefied natural gas (LNG) sales to the US also making a positive contribution to operating income for the year. In terms of refining, the stronger Argentine peso against the US dollar helped boost the company's refining margins 106% to US$3.19 a barrel in 2003 compared to 2002, despite the crude price-fixing agreement still in place in Argentina to keep the crude price at US$28.5/b, Manas said.

Sales of refined products in Argentina increased 3% to 12.8 million tons (mt) in 2003 compared to the year before. Sales to Repsol YPF's own network fell 2.4% to 6.8mt, compensated by sales to the domestic market, which increased 27% to 1.31mt and exports, which increased 5.8% to 4.65mt.

Sales of refined products in the rest of Latin America increased 25.7% to 7.89mt in 2003 compared to the year before, driven by 14.7% higher sales to the company's own network, 48.1% higher sales to the domestic market and 8.8% higher exports.

In terms of petrochemicals, Repsol YPF increased its sales of base petrochemicals in Argentina 20.7% to 206,800 tons in 2003, while sales of derivative petrochemicals increased 23.6% to 455,100t year-on-year. Repsol YPF's investment in exploration and production totaled 2.17bn euros in 2003, up 101% year-on-year, including payment for a 20% stake in UK company BP's Trinidad and Tobago subsidiary BPTT, the statement said.

Expenditure in development accounted for 39% of the total, and went mainly to Argentina (64%), Trinidad and Tobago (13%), Bolivia (7%), Ecuador (5%), Libya (3%) and Venezuela (3%). Investment in exploration and production in Argentina increased 16% in US dollar terms in 2003, but fell in euro terms, Manas said, without detailing the amount.

Repsol YPF aims to invest more in Trinidad and Tobago in 2004 to continue construction of the Atlantic LNG's fourth train and explore the Albacora Leste production field in Brazil's Campos basin, Cortina said.

Longer term, Repsol YPF is looking at developing its gas business in Mexico, having been awarded the Reynosa-Monterrey block in the Burgos basin in late 2003 and a land-use permit for its proposed LNG resgasification terminal at Lazaro Cardenas port, Cortina said. Repsol YPF posted net income of 2.02bn euros in 2003, 3.5% higher than the year before.

About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports.

Click here for a Free two week trial to our Latin America Oil & Gas information service.