As we explained in our recent free report on the new Argentinian government’s policies, Energy Minister Juan José Aranguren wants a new management for YPF. The company is still a private corporation that is quoted on the New York stock exchange and has many domestic and foreign shareholders. The majority 51% stake is, however, still owned by the Argentine State and by several hydrocarbon-rich provinces. It is therefore controlled by the national government.
Former president Cristina Kirchner’s appointee, Miguel Galuccio, was both chairman and CEO but Aranguren wants to split the roles. Until a few days ago, Galuccio was expected to remain CEO while he was replaced as chairman. Aranguren and other members of the government finally reached the conclusion that it was better to appoint new individuals for both roles.
Galuccio knew the oil industry. His performance was much better than that of the politicians who ran the national airline. Despite this his views were always ambiguous. He would insist on YPF’s being a private company in order to avoid being controlled by the agencies which audit government expenditures and investments. He would, however, resort to Cristina Kirchner to obtain more favourable treatment from the government than that afforded to other private companies in the awarding of concessions and permits.
At a time when the Central Bank’s losing foreign currency reserves he increased YPF’s debt from US$2 billion to US$ 7 billion and thereby brought US$ into the country. It is unclear whether this benefited YPF or simply helped Kirchner reach the end of her presidential term without being forced to implement a major devaluation of the peso.
The new YPF chairman will be Miguel Gutiérrez — the former CEO of Telefónica de Argentina — who became a member of YPF’s board in December, 2015, after President Mauricio Macri’s inauguration. Gutiérrez is not an oil-man but has considerable experience in the private business sector. A national and international head-hunt to find a new CEO for YPF will now begin but Galuccio will step down from both positions in April.
This is an excerpt from an article in this month’s Argentina Strategic Brief – for more information please contact us at info@menas.co.uk.
