REPSOL has not enough oil to be a big energy company, one of the reason is from the last years when its main investing were in some latinoamerican countries, however a kind of nationalistic resurrection change the game rules for REPSOL.

If we remember, one of the best deals for REPSOL was to bought the state-owned oil company of Argentina called Yacimientos Petroliferos Fiscales or YPF, a historical oil company specialising in the exploration, production, refining and commercialisation of petroleum, but for REPSOL the most important was its oil and gas reserves. This southamerican state-owned oil company was privatized in 1991, the State retained a 5 per 100 share, which it sold in 1999 to REPSOL, buying the entire company; former YPF operations represent almost 50 per 100 of its production.

With the new rules in some countries from the Americas like: Bolivia, Ecuador, Argentina, Venezuela, Nicaragua, etc.. (Bolivia, its worse experience.) REPSOL needs to change its strategic, because in some years the most important of its bets are lose it.

In Argentina, In 2004, President Kirchner created Energia Argentina Sociedad Anonima (ENARSA), an energy company of which the state controls 53 per 100, this state decision is important for REPSOL, because YPF going to have an important competence to get oil deal to have new reserves from Argentina. Now, ENARSA is working together with Venezuelan state-owned (PDVSA) in a several energy projects.

In another hand, PETROBRAS (is a semi-public brazilian oil company) is protecting its natural territory (Brasil), we could to find that the foreign Invest energy companies only get opportunities in the regions with excessively risk business. The last decade, one of the best ¨classics¨ to get a new oil projects in the Americas was the fight between REPSOL and PETROBRAS, now the brazilian company is ahead closing Successfully business.

In Venezuela, REPSOL no have opportunity, after the last October during the Iberoamerican Meeting in Santiago de Chile, with ¨¿ Por que no te cayas ?, from Juan Carlos I, King of Spain¨, the President Chavez, gave the order to check the REPSOL business in Venezuela, for the energy community this means REPSOL have new problems, because Chavez and PDVSA have influence in another american countries, on the other hand Chavez announced a GALP Energia (Portuguese company) like a new partner for Europe.

So, what can REPSOL to do, if don’t want to find the bankruptcy ?
Like a first measures, In last months, REPSOL announced is planning to float between 15 per 100 and 20 per 100 of YPF’s shares in Argentina’s stock market, but the most important is that REPSOL have a few oil reserves and its problems continuing, the last of them, is lost Gassi Touil Project from Argelia.

One of the best scenarios to REPSOL is find new oil deals in Mexico, because the aztec country need technology to looking for new reserves in deep waters, but the inconvenience are the property of this oil reserves, so, only owner going to be the Mexican State. This point is the main reason to understand, the few interest from foreing energy companies to invest in Mexico, but the difference between another foreing energy companies and REPSOL in relation with Mexico, is that Petroleos Mexicanos (PEMEX) is one of the most important shareholders of REPSOL.

The REPSOL dilemma could be: If the mexican open the door to REPSOL to new and different kind of oil deals, REPSOL could accept that PEMEX buy additional shares of REPSOL. This situation could be useful for PEMEX to be more competitive and interesting for REPSOL to eliminate any scenario of bankruptcy. PEMEX and REPSOL could build a new kind of synergy to be competitive in their ¡energy power chess! .

|Manuel Torres Laveaga
*Notes:
REPSOL|PEMEX|ENARSA|PDVSA|PETROBRAS|GALP ENERGIA

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