Repsol-YPF to Invest US$6.7bn Through 2009
Spanish oil company Repsol-YPF (NYSE: REP) will invest US$6.7bn in Argentina through 2009, US$700mn more than originally planned, Repsol-YPF's president Antonio Brufau announced following a meeting with Argentine President Néstor Kirchner.
The company plans to invest about US$1.3bn a year in Argentina. "We are studying all the investment opportunities, as much in exploration, development and production as in the improvement of our refineries, logistical systems, marketing and petrochemicals," local press quoted Brufau as saying.
The investment is part of Repsol's plan to invest US$25.3bn globally between 2005 and 2009, US$8bn of which will be directed toward its ABB division (Argentina, Brazil and Bolivia).
The US$6.7bn investment in Argentina marks a 32% increase compared to the previous 5-year period (2000-2004), Repsol-YPF said in a statement.
"Due to the progress we are making and the improvement in the economy in general, we project investments for the period 2005-2009 of US$6.7bn," Brufau said.
Brufau highlighted the fact that Argentina has enough hydrocarbon reserves to sustain itself for nine years, but did not dismiss the possibility that the country may need to import oil to meet domestic consumption in the medium term, newspaper La Nación quoted him as saying.
EXPLORATION & PRODUCTION
Repsol-YPF invested US$1.03bn in exploration and development in Argentina in 2005, the statement said.
In the past two years the company has invested US$169mn in exploration to drill 43 exploratory wells, which constitutes more than 50% of the total wells drilled in Argentina, the statement said.
Of that amount, US$54mn went to drill onshore oil wells, US$82mn to drill for gas at depths of 3,000-5,000m in the Neuquén basin and US$33mn for offshore exploration including 3D seismic in deepwater in the Malvinas basin and seismic in the San Jorge basin.
Repsol-YPF plans to invest US$80-100mn a year in new exploration through 2009, the statement said.
Repsol-YPF also drilled 760 development wells this year and plans to apply new technologies not previously used in existing fields.
Finally, Repsol-YPF invested US$100mn to expand capacity on the Gasoducto Norte pipeline by 1.8 million cubic meters a day in order to improve the distribution of gas in northern Argentina. Work on the expansion is nearly complete and is scheduled to wrap up in early 2006.
REFINING & MARKETING
Repsol-YPF invested US$180mn in refining, logistics and marketing in 2005, which it plans to increase to US$400mn in 2006.
The company's three refineries - La Plata, Luján de Cuyo and Plaza Huincul - are all producing at maximum capacity to supply the local fuel market. Repsol's participation in the fuels market is 57%.
Repsol-YPF plans to invest US$30mn to build a biodiesel plant in Ensenada to supply fuel to Argentina, Brazil and Bolivia, the statement said.
Repsol-YPF plans to invest US$134mn to build a new corporate office in Puerto Madero near Buenos Aires to be inaugurated in 2008.
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