BUENOS AIRES -(Dow Jones)- Brazilian energy companies AES Uruguaiana Empreendimentos SA and Companhia de Gas do Estado do Rio Grande do Sul, or Sulgas are seeking $1.05 billion in damages from Argentine energy company YPF SA (YPF) over disputed natural gas contracts.
The claims arise from the Argentine government's decisions to oblige YPF to deliver natural gas to the domestic market regardless of other contracts it had in place, and to impose direct limits on natural gas exports, YPF said Wednesday in its annual filing with the U.S. Securities and Exchange Commission.
"As a result of these measures, from 2004 to the present, we have been forced in many instances to partially or fully suspend natural gas export deliveries that are contemplated by our contracts with export customers," YPF said.
During the 2001-2002 crisis, the government devalued the currency and froze utility rates, meaning natural gas companies were receiving one third of the values under their contracts. Investment and production slowed, while a number of companies had contracts with overseas customers, which were paying far higher prices than the local market, leading to shortages in Argentina.
YPF, a unit of Spain's Repsol (REP), said it has appealed the government's measures in court but that in the meantime it heeded the requests to avoid "the revocation of our export permits or other penalties."
According to YPF, the government intervention is an event of force majeure that releases it from any liability.
AES Uruguaiana, a unit of AES Corp.'s (AES) operations in Brazil, and Sulgas, owned by the Rio Grande do Sul state government, filed the case at the International Chamber of Commerce, according to YPF. The Argentine firm said it has filed its own request for arbitration.
Representatives for AES and Sulgas declined requests for comment.
-By Matthew Cowley, Dow Jones Newswires; +54 11 4103 6740; matthew.cowley@dowjones.com
(Rogerio Jelmayer in Sao Paulo contributed to this report.)