Argentina's state-controlled energy company, YPF, has lost a potential multimillion-dollar international arbitration case over the suspension of natural gas exports to Brazil, the company said on Monday.
Plaintiffs are reported to be seeking well over $1 billion in compensation for YPF's suspension of gas exports starting in 2004 and its rescission of the contracts with AES Uruguaiana (AESU) y Transportadora de Gas del Mercosur in 2009.
Continue Reading Below
At the time, YPF was controlled by Spain's Repsol . The center-left government of President Cristina Fernandez seized Repsol's majority stake in the country's biggest energy producer last year.
"This ruling only determines the responsibility of the parties. The determination of whatever damages that might exist is subject to a new arbitration process before the same tribunal," YPF said in a statement to the Buenos Aires stock exchange.
"YPF is analyzing the grounds of this arbitration ruling and will energetically defend its interests and those of its shareholders," the company said.
The case was brought before an arbitration panel at the Paris-based International Chamber of Commerce. Argentina's La Nacion newspaper said in November that the companies - including a third one that was not mentioned in the YPF statement - were seeking $1.633 billion in compensation.
An industry source familiar with the case said the figure was closer to $1.4 billion. The source said the third company cited by La Nacion - Companhia de Gas do Estado do Rio Grande do Sul (Sulgas), which is part-owned by Brazil's Petrobras - sued alongside AESU and was included in the ruling.
Officials at YPF declined to comment, as did the spokeswoman for Petrobras. No one was immediately available at the other companies that won the arbitration case to provide details.
YPF's shares closed down 3.61 percent at 114.70 pesos per share in Buenos Aires .
Transportadora de Gas del Mercosur operates an Argentine pipeline that runs up to the border with Brazil. Its shareholders include Argentina's Tecpetrol, France's Total , Malaysia's Petronas and U.S.-based CMS Energy .
AESU belongs to power utility AES Brasil, which is the Brazilian unit of U.S. energy giant AES Corp .
(Reporting by Karina Grazina and Alejandro Lifschitz; Additional reporting by Jeb Blount in Rio de Janeiro; Writing by Hilary Burke; Editing by W Simon and Dan Grebler)