Argentina Minister Sees Fewer Gas Cuts To Industry This Winter
06/01/2012| 02:10pm US/Eastern
Argentine manufacturers will probably suffer fewer cuts to their natural gas supplies this winter thanks to the nationalization of oil and gas company YPF SA (YPF, YPFD.BA) earlier this year, Planning Minister Julio De Vido said Friday.
"I estimate we will have fewer interruptions because we will have more gas," De Vido, who is in charge of energy and public works, said in a televised press conference Friday.
For years, Argentina has rationed gas to industrial companies in the Southern Hemisphere's cold winter months to ensure residential users have enough to heat their homes.
But this year, the first gas cuts came during a cold snap in late April and early May instead of in June and July as is often the case.
Industry is already suffering from high inflation, a strong peso and sluggish demand for Argentine manufactured goods in Brazil.
Industrial production fell 0.5% on the year in April, and was virtually unchanged from March, according to government data.
Onerous price caps have deterred investment in oil and gas exploration and production. As a result, the government has been forced to import growing volumes of more expensive gas from Bolivia and Trinidad and Tobago.
Last month, President Cristina Kirchner expropriated a 51% stake in YPF from its controlling shareholder, Spain's Repsol YPF SA (>> Repsol YPF SA).
Kirchner accused Repsol of not investing enough in Argentina to reverse years of declining oil and gas production that have turned the South American nation into a net energy importer.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740, firstname.lastname@example.org