AES, Sulgas Claim $1.05 Billion Damages Over YPF Natural Gas Dispute
July 02 2009 - 11:12AM
Dow Jones News
Brazilian energy companies AES Uruguaiana Empreendimentos SA and
Companhia de Gas do Estado do Rio Grande do Sul, or Sulgas are
seeking $1.05 billion in damages from Argentine energy company YPF
SA (YPF) over disputed natural gas contracts.
The claims arise from the Argentine government's decisions to
oblige YPF to deliver natural gas to the domestic market regardless
of other contracts it had in place, and to impose direct limits on
natural gas exports, YPF said Wednesday in its annual filing with
the U.S. Securities and Exchange Commission.
"As a result of these measures, from 2004 to the present, we
have been forced in many instances to partially or fully suspend
natural gas export deliveries that are contemplated by our
contracts with export customers," YPF said.
During the 2001-2002 crisis, the government devalued the
currency and froze utility rates, meaning natural gas companies
were receiving one third of the values under their contracts.
Investment and production slowed, while a number of companies had
contracts with overseas customers, which were paying far higher
prices than the local market, leading to shortages in
Argentina.
YPF, a unit of Spain's Repsol (REP), said it has appealed the
government's measures in court but that in the meantime it heeded
the requests to avoid "the revocation of our export permits or
other penalties."
According to YPF, the government intervention is an event of
force majeure that releases it from any liability.
AES Uruguaiana, a unit of AES Corp.'s (AES) operations in
Brazil, and Sulgas, owned by the Rio Grande do Sul state
government, filed the case at the International Chamber of
Commerce, according to YPF. The Argentine firm said it has filed
its own request for arbitration.
Representatives for AES and Sulgas declined requests for
comment.
-By Matthew Cowley, Dow Jones Newswires; +54 11 4103 6740;
matthew.cowley@dowjones.com
(Rogerio Jelmayer in Sao Paulo contributed to this report.)