Repsol YPF will have to compensate Petroleo Brasileiro for the plunge in the Argentine peso, as part of a billion dollar asset swap between the two oil companies, Petrobras Chief Executive Officer Francisco Gros said.
“As it stands right now we should be getting some compensation from Repsol,” said Gros, in an interview in Madrid. He declined to say how much Repsol will pay Petrobras.
Repsol's profit plunged by fifty eight percent in 2001 as the company set aside 2.74 billion euros ($2.7 billion) from reserves and earnings to cover potential losses from the 72 percent plunge in the peso this year against the dollar. Repsol, which is Europe's fifth largest oil company, bought YPF in Argentina for fifteen billion dollars in 1999.
Repsol and Petrobras completed an asset swap last year that includes provisions for declines in currencies in Brazil and Argentina. Gros said the currency impact is revised monthly. A Repsol spokesman declined to comment.