Petropar signs YPF contract

Paraguay's state oil firm Petropar has signed a contract with Argentine company YPF to receive 152 billion cubic meters (bcm) of diesel and 18,000 cubic meters of crude oil through January 2005, Petropar fuels purchasing manager Balbino Ferreira told BNamericas. The contract is part of Petropar's plans to buy 380bcm of diesel. Petropar aims to sign other contracts with Brazil's federal energy company Petrobras and Swiss trader Glencore to supply 54bcm of diesel each by September 22, Ferreira said. In percentage terms, Petropar awarded 40% of the fuel supplies to YPF, and 30% each to Petrobras and Glencore. The contracts are to supply fuel for four months from October through January. YPF offered to supply the fuel for a premium of US$27.69 a cubic meter over international prices, which Glencore and Petrobras will also receive. The premium is about US$5 more than the premium YPF offered in a tender Petropar held in July to supply fuel for six months. Petropar declared the July tender void because the prices offered were considered exorbitantly high, and it aimed to obtain a lower price on the spot market. However, the plan has backfired and now Petropar will be forced to spend some US$5mn more to cover its fuel needs than it would have spent had it bought the fuel through the previous tender. Ferreira says the higher premium is due to refining problems in Argentina and higher transport costs.