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Oil company sale collapses due to new regulations

by on November 7, 2011

A BP-owned Argentine oil company, Bridas, canceled the rest of its sale to a Chinese firm due to the new measures imposed by the Kirchner government in regards to investing their profits within Argentina.

This comes less than a week after new regulations raised the investiture by oil, gas, and mining firms from 20-30% to 100% of profits. This is a direct sign that the deal’s $7.1 billion weight was not good enough compared to the imagine profit loss due to the higher amount of future investing now required by the government. This was also instigated by the downgrading of several such oil companies by international ratings agencies. International firms do not trust the government in making them invest so much of their profit within Argentina, as Argentina is desperate for investiture. What will be the next firm to try and pull out?

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From → Economic Policy

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