World » Americas
Author`s name Dmitriy Sudakov

Scandals in South America harass Spain’s oil giant Repsol

Spain’s oil multinational Repsol-YPF, which has just agreed to purchase 10% interest in West Siberian Resources (WSR; formerly Vostok Oil Ltd.), a Swedish oil and gas firm active in Russia, has gone through a series of major scandals that could undermine its prominent position in the South American market. The company based in Madrid has its main actives in the region and has recently reported a 25% cut in its oil and gas reserves, which led to fraud demands in Europe and the USA filed by frustrated shareholders.

Last week, the Bolivian government referred to its attorney general an oil smuggling investigation alleging that Andina SA, a Repsol-YPF subsidiary illegally imported oil and falsified documents. Bolivian customs agents have been investigating Andina since December and contend the company smuggled 230,400 barrels of crude petroleum worth $9.2 million, said Ricardo Alba, president of Bolivian customs.

In Argentina, where the company holds enormous but frequently overestimated oil and gas reserves, a group of center-left MP’s have asked the National Stockexchange Commission to investigate Repsol-YPF on an alleged fraud to its shareholders for having overestimated reserves in its reports to the US Security Exchange Commission (SEC).

On January 26, the company downgraded its proved reserves by 1.254 billion barrels of oil equivalent, primarily related to natural gas reserves. The majority of the revisions are in Bolivia, accounting for 52 percent, and Argentina, with 41 percent, Repsol said in a filing to the Spanish regulator, the CNMV. It also revised smaller amounts in Venezuela and elsewhere. As a result of the downgrade, Repsol's reserves will fall to 3.672 billion barrels of oil equivalent from 4.926 billion barrels of oil equivalent, with some 71 percent of the drop relating to natural gas reserves, according to the Lisbon-based brokerage BPI.

Elisa Carrio, Eduardo Macaluse and other members of the ARI center-left party believe that Repsol-YPF “issued false documentation and released false statements about its oil and gas reserves”. According to this opposition party, “this information is vital for investors to asses the company’s economic progress”.

In the meantime, Bolivan Customs handed over its evidence to prosecutors in the city of Santa Cruz on Monday to start the legal process where the government will seek $9.2 million in fines from Andina. Royalties and taxes on the petroleum would have totaled $215,000.

Repsol denied the charges in a statement earlier this month."There wasn't any smuggling. There was no intent to avoid any control nor to evade paying taxes," Repsol said. "In its day, the documentation was presented to the customs in Bolivia and the charges were denied by the company. The company acted at all times with transparency and the Bolivian state was always informed of shipments as well as receiving the corresponding taxes."

Both cases are now in progress but could have different ends. As the new Bolivian government lead by indigenous leader Evo Morales seized power promoting the nationalization of the country’s vast hydrocarbon reserves, Argentina’s Nestor Kirchner was a key lobbyst in the privatization of the Argentine oil giant YPF when he was governor of the oil-rich province of Santa Cruz in 1994. Then, the Spanish Repsol took over the company and signed juicy deals with Kirchner since he rose to power in May 2003.

Hernan Etchaleco

Representatives of the North Korean administration issued a statement saying that the United States and its allies have lost the "political and military confrontation" to the DPRK

North Korea declares victory over USA

On December 10, 1948 the Universal Declaration of Human Rights was adopted by the United Nations General Assembly, its thirty articles enshrining basic and fundamental rights guaranteeing dignity of the human person and equality for all, regardless of race, color, creed or gender. A pipe dream?

Human Rights Day: Let us hang our heads in shame
Comments
Why did Donald Trump recognise Jerusalem as the capital of Israel?
Russian athletes announce their decision about 2018 Winter Olympic Games
Putin makes first comment on Trump's Jerusalem decision
Putin makes first comment on Trump's Jerusalem decision
Russian politician says Donald Trump extremely dangerous for Russia
Russia on the eve of another Crimea referendum
Some ideas about North Korea
Russia on the eve of another Crimea referendum
Russia on the eve of another Crimea referendum
Russia on the eve of another Crimea referendum
Russia on the eve of another Crimea referendum
Russian athletes announce their decision about 2018 Winter Olympic Games
Russia works on MiG-41 doomsday fighter jet
The need for a Global Political Agenda 2018
New Russian weapons shocked USA three times
USA looking for reason to see nuclear weapons in action
Russia works on MiG-41 doomsday fighter jet
Putin makes first comment on Trump's Jerusalem decision
Putin makes first comment on Trump's Jerusalem decision
Ukrainian politicians and businessmen aim to visit Crimea
The Myth of the Gene: Genetics, Epigenetics and the Organism-Environment Loop