YPF Sociedad Anonima (YPF SA) is Argentina's premier oil company and a subsidiary of the Spanish based Repsol YPF. Their recently announced exploration programs projected for the 2010-2014 period1 and significant dividend payment indicate its sound financial footing.
Influenced by shifts in the oil (and more generally energy) markets YPF is also a part of the Chemical and Marketing industry. As such it is also subject to the rising popularity in liquefied petroleum gas for its environmentally sound qualities. The company has a very strong social outreach program that furthers its market penetration.
YBF is a multi-industry company largely popular with the government and the people of Argentina.
The company is divided into four business segments: Exploration and Production (Oil), Refinery and Marketing, Chemical, and General Management. Note: The numbers in the following section are as reported for the last trimester of 2009 5.
Following the peak in the $/bbl on July 11,2008 of $147.27 barrel oil prices have decreased considerably. OPEC announced its decision to keep its production levels unchanged on Dec 22, 2009 citing concerns regarding a now two year period in which world oil demand has declined 8. YPF has a sizable internal market as well which counteracts the general declining trend as it has been able to obtain higher than average prices for its oil inside of Argentina 9.
Latin American demand for oil is expected to increase to 7.66MM barrels by 2010. Demand for oil and gas is increasing in Latin America where most predictions - including the EIA's - expect global demand for oil to decrease. Further, in regards to the Argentinian oil industry the country now ranks 5th of 9 according to the BMI Business Environment Ranking Matrix.10
The dollar is currently struggling between maintaining enough value to keep global business transactions and national reserves in dollars and cheap enough to sustain American exports 11. As signs of economic growth are seen all over the world, historical data shows that commodities will rise. This on top of the traditional regularity with which foreign companies pay dividends suggests a growing demand for high yield foreign stocks.
Argentina retains 2.7BB barrels of oil of proven reserves and is the third largest oil producer in Latin America. Further, since 2000 Argentina has established itself as the largest natural gas producer.12
The U.S. Commodity Futures Trading Commission seeks a compromise between limiting speculation in the energy (oil) markets and maintaining liquidity. As it stands right now position limits are set by exchanges like the New York Mercantile Exchange (NYMEX) and the Chicago Mercantile Exchange (CME). Tighter restrictions on energy contracts could push investors seeking liquidity to foreign markets and foreign companies like YPF.
Though YPF accounts for about 39% percent of the oil production in Argentina, there are other major players as well. Argentina's oil industry is open to the private sector (national and foreign). YPF was privatized only after having its beginnings as a government owned agency 12. Its main competitors are:
The first two are considered competitors in large part due to their large market share. Both Chevron Corporation (CVX) and Pan American Energy as well as YPF have plans for exploring off shore reserves.
1 - http://www.chacodiapordia.com/2008/noticia.php?n=37678
2 - http://184.108.40.206/hypersoft/Normativa/NormaServlet?id=15120
3 - http://www.profertil.com.ar/english/index.jsp
4 - https://imagenes.repsol.com/ar_es/Estados%20Contables%20-%20Anual%202008_tcm51-519669.pdf
5 - https://imagenes.repsol.com/ar_es/Estados%20contables%20YPF%20S_tcm51-551323.pdf
>6 - http://www.ypf.com/ar_es/todo_sobre_ypf/conozca_ypf/ypf_en_el_mundo/quimica/introduccion/default.aspx
7 - http://www.profertil.com.ar/english/index.jsp
8 - http://www.opec.org/opecna/Press%20Releases/2009/pr132009.htm
9 - https://imagenes.repsol.com/ar_es/Estados%20Contables%20-%20Anual%202008_tcm51-519669.pdf
10 - http://www.tenergias.com.ar/Joomla/index.php/faq/48-1/516-preven-una-mayor-demanda-petrolera-en-el-mundo-durante-el-proximo-ano.html || http://www.wtexec.com/cms/content.jsp?id=com.tms.cms.section.Section_bookstore_argentinaoilgas
11 - http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html
12 - http://www.mbendi.com/land/sa/ap/p0005.htm
13 - http://www.panamericanenergy.com/
14 - http://www.chevron.com/countries/argentina/
15 - http://www.hoy.com.ec/noticias-ecuador/petrobras-se-adjudico-dos-areas-exploratorias-en-patagonia-argentina-380206.html