Chevron's investment with Argentina's government of thieves challenged

Fuel Fix:
Repsol SA (REP) is asking a World Bank panel to help prevent Argentina’s YPF SA from developing assets seized from the Spanish oil producer after Chevron Corp. agreed to invest $1.24 billion in a shale venture in the country.

The request was filed yesterday to the Washington-based International Center for Settlement of Investment Disputes, asking the arbitrator to instruct Argentina to abstain from developing strategic YPF assets such as the Vaca Muerta shale formation, Repsol spokesman Kristian Rix said. The filing couldn’t immediately be verified on the ICSID website and the center didn’t respond to an e-mailed request to comment.

Chevron’s plan to tap Vaca Muerta in an accord with YPF this month comes as Repsol disputes the seizure of its 51 percent stake in the Argentine company by President Cristina Fernandez de Kirchner’s government last year. Repsol has another lawsuit at the ICSID demanding fair compensation for the seizure of its YPF stake, which came shortly after the Argentine company announced Vaca Muerta discoveries of at least 23 billion barrels of oil equivalent.

“We need fair compensation, which is something that, after 15 months, we haven’t seen,” Repsol’s Chief Financial Officer Miguel Martinez said today in a call with analysts. Chevron is interfering with Repsol’s compensation by investing in what it considers illegally confiscated assets, he said.
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It is not clear why Chevron thinks Argentina want still their work product if they successfully drill in the disputed area.  It is certainly the governments history and Repsol claim is just the latest.  I would have advised against the investment, but it appears that Chevron's outside lawyers will profit handsomely from the venture.

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