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Oil Companies Warned Off Investing in Argentina

Argentina’s renationalized oil company YPF has been courting foreign investors to tap shale gas and crude reserves that could rank as the world’s third largest, but U.S. companies would be wise to shy away from the offers, energy experts advised today.

There are just too many risks to investing in Argentina, said Bud Weinstein, associate director of Southern Methodist University’s Maguire Energy Institute and University of Houston petroleum engineering professor Michael Economides.

Energy companies looking to make deals with YPF “need to make sure before going in that they have some very ironclad contracts that guarantee them payments or at least a rate of return,” Weinstein said. “In recent years, Argentina has abrogated contracts, refused to abide by (WTO judgments) and also failed to honor more than 100 court judgments in the United States demanding payment.”

Source: FuelFix. Read full article. (link)

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