In a bid to save her Presidency and her country’s economy, Argentine President Cristina Fernandez de Kirchner will steal, I mean nationalize 51% of Repsol's 57.43% stake in YPF SA (NYSE: YPF) – a move that should worry investors in Azabache Energy (CVE: AZA), ArPetrol (CVE: RPT) and Crown Point Ventures (CVE: CWV) which also have investments in Argentina’s oil and gas sector. To begin with, Kirchner's excuse for grabbing YPF SA (YPF) is that the company has not done enough to develop its oil reserves as the country becomes a net oil importer – something the country cannot afford as wealthy Argentines can’t get their money converted into dollars and then out of the country fast enough. Moreover, Argentina has limited borrowing options after burning investors on its 2001 default and Kirchner has already grabbed pensions and the country's national airline in earlier nationalizations to shore up government finances while provinces have also been busy trying to seize oil and gas concessions. To make matters worst, most of the oil and gas contracts in Argentina apparently have vague wording – which may allow provincial and the federal governments alike to illegally seize them. However, it would make the most sense for Kirchner and the provinces to steal what has already been discovered, paid for and developed by someone else – meaning do investors in oil and gas stocks Azabache Energy (AZA), ArPetrol (RPT) & Crown Point Ventures (CWV) have something to really be worried about? Here is a look at all three and their Argentina assets or exposures:
With the nationalization of YPF SA (YPF), Crown Point Ventures (CVE: CWV) should have waited with their acquisition while it appears that Neuquén province is best avoided as it prepares to seize a block from Azabache Energy (CVE: AZA) and ArPetrol (CVE: RPT) remains a question mark.