Category: Argentina

Argentina agreed to a 47 percent increase in the cost of its Bolivian natural gas imports, easing tensions between the two countries. Bolivia’s President Evo Morales insisted on the increase that now puts pressure on Brazil to do the same. Brazil buys 70 percent of Bolivia’s gas and depends heavily on the Andean nation. Argentina will now pay $5 per million British thermal units of gas. Petrobras, the Brazilian oil company, will pay between $3.80 and $4.65 starting in July.

The Peruvian government approved a deal for six multinationals to invest $720 million to develop part of the Camisea gas field in southern Peru. The consortium is made up of Argentina’s Pluspetrol, Hunt Oil Company from the U.S., South Korea’s SK Corp., Algerian Sonatrac, Spain’s Repsol and the unit of Argentine industrial conglomerate Techint, Tecpetrol. Camisea is estimated to contain 8.7 trillion cubic feet of natural gas, making it the third largest such field in South America. The group plan to export the gas to Mexico, which has been unable to develop its own vast reserves.

Argentina is to lodge a formal complaint against Chile before the World Trade Organization (WTO) for blocking beef exports because of an outbreak of foot and mouth disease. The two neighbors are also locked in argument over wheat price controls at the WTO.

Industrial production in Argentina rose 7.3 percent in May compared with the same month a year earlier. In the first five months of the year industrial output is 7.1 percent higher. The growth was led by automobile production and construction materials.

Argentina has signed an agreement with Spanish group Marsans to increase its equity stake in Aerolíneas Argentinas. Argentina will buy up to 20% of the company up from the 1.34% the government currently holds. The deal was agreed during a visit of Argentina’s president, Nestor Kirchner, to Spain. Argentina privatized the former national carrier in 1990.

Argentina is to sell another $242 million of its dollar-denominated paper to Venezuela. The sovereign will reopen its Boden 2012 issue to place the bonds directly with Chávez’s government in Caracas. Venezuela is the largest holder of Argentina’s debt: since the middle of last year it has bought a total of $3.24 billion. It last bought paper on June 9 when it acquired $200 million of the same Boden issue. Meanwhile, Argentina has postponed plans to sell the outstanding $500 million of its new Bonar V dollar paper.

The Argentine economy grew 8.6 percent in the first quarter of the year, driven by a continuing recovery in manufacturing and construction. The economy has grown 37.5 percent from the trough it fell into in 2002 when the government defaulted on its debt. Meanwhile prices rose 2.6 percent in the first quarter, signaling runaway inflation remains a threat.

The government of Argentina is reportedly considering taking a stake in former national carrier Aerolíneas Argentinas. It may buy as much as 20% of the shares from Spanish travel group Marsans which bought the airline in 2001 when it was on the verge of financial collapse.

Spanish financial group BBVA has sold its remaining 5% stake in Spanish-Argentine oil company Repsol YPF for $657 million. BBVA will use the funds raised from the sale to help buy US banks Texas Regional Bancshares and State National of Texas.