Petrobras eyes assets in financially strained Argentina. (Company News).

The fallout from Argentina's fiscal woes has staggered the oil and gas industry there, as it has other sectors.

That has provided a new window of opportunity for South America's most dynamic new petroleum sector player, Brazil's Petroleo Brasileiro SA (Petrobras).

The fiscal crunch in Brazil's neighbor to the south has spurred Petrobras to shop for assets suddenly devalued as a result of Argentina's fiscal collapse.

Petrobras recently announced plans to acquire a controlling interest in Perez Companc SA, South America's largest independent oil and gas company, for $1.18 billion (OGJ Online, July 29, 2002).

That followed shortly Petrobras's announcement that it is considering acquiring Petrolera Santa Fe, the Argentine subsidiary of Oklahoma City-based Devon Energy Corp. (OGJ Online, June 17, 2002).

And now the Brazilian giant says it wants to purchase the Argentine assets of Repsol-YPF SA--but at a discounted cost that Petrobras claims it is contractually entitled to because of losses, stemming from the devaluation of the Argentine peso, that were incurred in an asset swap between the two firms.

Meanwhile, the Argentine government lifted recently imposed strictures regarding oil exports and diesel sales taxes that domestic petroleum firms had complained were worsening their plight. That change has already bolstered those companies' near-term earnings outlooks.

Repsol-YPF assets eyed

Petrobras Pres. Francisco Gros said in Madrid recently that the Brazilian company wants to purchase, at a discount, Repsol-YPF's Argentine assets as compensation for the devaluation of Argentina's peso, which caused financial losses for Petrobras as a result of the S 1 billion asset swap between the two companies that took place last year (OGJ Online, Jan. 2, 2001).

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