The Rising Influence of Rising Affluence

[semi_infinite]

The Eskanazi's are SOL. I thought more about how Repsol got here and it must have to do with their oil price forecast back in the 90's. The agreement for them to takeover the Ypf stake must have been collared. Argentina must have agreed to downside protection in exchange of Repsol giving up upside and limit on ROR and netback. They essentially bought Ypf with shackles included that prevented them from higher cost plays with the expectation that oil prices will stay in the 1980-90s band for a long time. This was the time period when Repsol was transitioning from state run to private and I guess they didn't have the sophistication for overseas ventures yet. Unbelievable.

I could see Repsol approaching Kirchner asking for adjustments to original terms. Why should Kirchner? She holds all the cards and she is laying them down.

I don't disagree with using the cash flow for higher cost projects now that their $15-40/barrel forecast have been discarded. The value is there.