Beyond YPF there is a smattering of energy companies that could soon find their properties suddenly taken away from them in the next few months if Fernandez has her way. Chevron (CVX), Total (TOT) and ExxonMobil (XOM) are the three major international energy companies with activities down in Argentina, but their exposure to the country is pretty small compared to their size. Total has the biggest exposure as it produces 86,000 barrels of oil equivalent per day, which represents around 4% of the company's total production. Chevron is next with 27 Kboe/d, representing around 1% of its production. ExxonMobil doesn't show any production from Argentina but it did recently sign a deal with Canada's Americas Petrogas to spend up to $76 million for a stake in a shale gas project.
Outside the majors there are a number of smaller oil companies that could get burned by Argentina. Apache (APA) derives 6.4% of its production from its Argentine assets. Production is slated to grow by 12% in 2012, according to the analysts at Barclays. Its shares fell hard Monday on the Repsol news but have since recovered slightly. Luckily for Apache, its Argentine production made up just 3% of the firm's total revenue last year. Overall, its Argentine assets make up around 4% of its reserves. Oklahoma-based WPX Energy (WPX) is another U.S. independent with exposure to Argentina. It produces around 9.5 Kboe/d in the country, making up 4.1% of its production.
The Canadian energy companies Azabache Energy (AZBCF) and Madalena Ventures (MDLNF) have the most to lose as they basically have all their energy holdings wrapped up in Argentina. The two relatively tiny energy companies saw their stocks collapse this week following the Repsol expropriation announcement. Azabache has the most to be worried about -- it has been warned by the government, as had Repsol, to increase spending on its fields or risk losing them. Americas Petrogas is another Canadian pure play in Argentina. It is larger than the other two Canadian pure plays with a 2.1 million-acre position in Argentina's prolific Neuquén Basin in the south of the country. The companies have said that they are not worried about having their lands expropriated, but judging by their stock prices this week, investors aren't buying it.
South of the border, there are number of Latin American oil companies that should be concerned about their Argentine assets. Pemex, Mexico's state-owned oil company, owns 10% of Repsol, so it is already feeling the heat. Privately-held Bridas Energy, through its Pan American Energy affiliate, is the second-largest energy company in Argentina behind YPF. While it is privately held, half of the company is owned by Cnooc, one of the large state-controlled Chinese energy companies. Meanwhile, Petrobras Argentina, a subsidiary of Brazil's Petrobras, was dealt a scare when an Argentine province last month revoked one of their oilfield concessions due to lack of investment. Its stock is down around 9% for the month.
Argentina may not stop at just the exploration and production companies. Transportadora de Gas del Sur (TGS), Argentina's largest pipeline operator, seems like a tasty target for Fernandez's energy ambitions. Like YPF, TGS also was a former government-controlled company, which was privatized in the late 1990s. It operates several key pipelines that are critical to moving gas out of the country for export. The company's stock is down 10% this week on fears that it could be next.
Fernandez could eventually wrest control of Argentina's entire oil industry, but she doesn't have to do it tomorrow. She could wait for the target companies to do all the initial hard work before swooping in for the kill. There are reports that government officials have reassured other energy companies that they are safe, but the government's word has been compromised. If the Argentine Senate votes to expropriate Repsol's holdings, the truth is that no energy company will ever feel safe to operate in Argentina for decades to come.
