Suit against YPF LNG tender dropped, imports to continue rising

Argentine consumers association UCA has ceased legal action against state oil firm YPF (NYSE: YPF) over LNG import tenders, state news agency Télam reported.

UCA claimed that there was a conflict of interest in the tender as YPF and tender winner Gas Natural Fenosa (GNF) were both owned in part by Spain's Repsol (NYSE: REPYY).

In October YPF refuted the allegations saying it acted within the law and under direct orders of state energy company Enarsa, which has no relation to GNF.

GNF was awarded all of the of LNG cargo contracts (25 in 2014 and 25 in 2015) for the Escobar LNG terminal as it was one of only a few companies able to adapt to the logistical requirements of the terminal.

During the proceedings UCA failed to disclose that it had been suspended by the national consumer protection ministry from representing Argentine consumers, according to a previous YPF statement in which the NOC promised retaliatory legal action.

In other YPF news, Moody's upgraded the NOC's global local currency rating to B3 from Caa1 and its national scale rating to A2.ar from Ba1.ar due to improved liquidity and strong financials as the company invests in the Vaca Muerta shale project.

IMPORTS ONLY TO INCREASE

Oil and gas imports have increased exponentially as demand continues to grow and domestic oil production has been in decline since 1998 and gas since 2004. To date oil and gas production has declined 5.99% and 3.12% respectively compared to the same period in 2012, Jorge Lapeña, head of energy institute IAE General Mosconi, said in a statement.

"We would go from US$13bn [in oil and gas imports] this year to US$15bn in 2014 on higher sales of premium gasoline," local press quoted Daniel Montamat, former YPF president and Argentine energy minister, saying.

Experts forecast the 2014 import bill will increase between 8% and 20% compared to this year, according to the reports.