UPDATE 1-Argentina ends some incentives for oil firms

* Analysts say measure impact is minimal (Adds details, quote, YPF closing share price)

BUENOS AIRES Feb 3 (Reuters) - Argentina has cut $461 million in annual tax breaks granted as investment incentives to big oil companies operating in the country, the government said on Friday, as part of a wider austerity program.

Argentina is preparing for a challenging year as Europe's debt crisis and the sluggish world economy bite into the finances of commodities-producing countries in South America.

The government of President Cristina Fernandez blames private sector oil companies for the country's waning crude production.

The decision affects companies such as Panamerican Energy (PAE), owned by BP and local firm Bridas; YPF, the local unit of Spain's Repsol ; China's Sinopec; and Brazil's Petrobras.

"The suspension will permit the state to save 2 billion pesos ($461 million) per year," said a statement from Argentina's Planning Ministry.

Argentina is cutting some popular transportation and energy subsidies in a bid to shore up its financial position. The South American country has been shut out of the international capital markets since its 2001/02 debt default.

Analysts said the latest measure is in the right track and impact on oil firms will be minimal.

"These are subsidies that the government gave to encourage them to extract more oil," said Gustavo Calleja, a former Argentine deputy fuels secretary. "They were given to them at a time when (the price) of crude was at a freeze," Calleja said.

Latin America's No. 3 economy is increasingly dependent on energy imports to meet surging demand for natural gas and oil since 2003, following a rebound from a deep economic crisis.

Shares in YPF closed down 5.5 percent at 153 pesos per share after the government announcement to slash oil firm incentives. YPF shares plunged earlier this week after reports that state officials were evaluating the possibility of renationalizing the company. ($1=4.335 Argentine pesos) (Reporting By Karina Grazina; Writing by Hugh Bronstein and Luis Andres Henao; Editing by Lisa Shumaker)