By Abigail Wilkinson?/?Business News Americas
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Calgary-based Gran Tierra Energy (TSX: GTE) does not see the Argentine government's recent expropriation of a majority stake in YPF as a threat to the firm's local assets, spokesperson for the Canadian firm, Jason Crumley, told BNamericas.
"We feel that there's little risk of losing Gran Tierra Energy's assets in Argentina; we are investing capital in the assets and keeping money that we're generating in Argentina within the country to grow production and create jobs," Crumley said.
On April 16, Argentina's President Cristina Fern?ndez announced a bill proposing the takeover of a 51% stake in YPF from Spain's Repsol (NYSE: REP), blaming the firm's lack of investment in Argentina.
"We feel what has taken place was very focused on Repsol and on their stake in YPF, and to a much lesser extent, potentially focused on those that are not spending money in Argentina," the Gran Tierra representative said.
Gran Tierra's capital program for 2012 is set at US$367mn, with the majority of that capital earmarked for Colombia and US$53mn for Argentina.
Although the firm acknowledges the potential financing repercussions for local industry as political uncertainty increases, it's not seen as a concern for Gran Tierra, as "with the cash flow that we're generating this year and with our cash in hand we do not anticipate any financing needs over the near term."
JUNIOR REACTIONS
Other juniors operating in the country have also officially distanced themselves from the takeover. Americas Petrogas (TSX-V: BOE) said in a statement that "none of these events affect Americas Petrogas."
"All of our blocks are in good standing with the applicable government authorities," CEO Barclay Hambrook was quoted as saying.
However, the move is causing some concern for juniors behind closed doors. "In this atmosphere there are not going to be too many people willing to invest in a smaller oil company," an industry source told BNamericas.
"There's got to be a price change - something to counteract the higher political risk in the country," the source said, or further development of the country's unconventional resources will be put at risk. "The longer the delay of large investments into the country, the longer it delays increasing the efficiency of shale resource exploitation."
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