Brazilian oil company Petrobras said Wednesday it will focus on investing in and developing its domestic energy sources rather than immediately invest more in concessions in Argentina.
The announcement from Petrobras Chief Executive Maria das Gracas Foster comes as Argentina is aggressively trying to develop its energy resources, and is seeking added commitments from companies already drilling for oil and natural gas in the country.
Argentina says it wants more control over its own resources, and last week seized control of YPF, an Argentinian oil company that was majority-owned by Spain's Repsol. The government accused Repsol of not doing enough to invest in Argentinian oil and natural gas. Argentina also seized YPF Gas, a gas utility that was also owned by the Spanish company.
The moves have angered Madrid, and Repsol has promised legal action against those investing in energy resources in the country that the Spanish company would have developed.
Last week's seizures have not been the only moves Argentina's government has made against foreign oil companies. Earlier in April, a Petrobras contract was revoked for similar reasons in Neuquen province, despite Petrobras officials saying they fulfilled their contracts' exploration requirements, Dow Jones Newswires reported.
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I see the Argentine minister's request for increased investments as legitimate, and Petrobras will announce something at the right time, Foster said. But we shouldn't put all of our eggs in one basket. Petrobras's priority is the [Brazilian] pre-salt, referring to oil and gas resources under water.
Brazil has large reserves of oil and natural gas under the Atlantic Ocean.
Foster said Petrobras remains interested in continuing its operations in Argentina, promising to maintain its $500 million per year contractual obligation.