YPF
Parent Secretary of Energy | | |
Website | ypf.com |
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YPF S.A. (Spanish pronunciation:
Founded in 1922 under President
YPF's first director was Enrique Mosconi, who took up his charge in 1922, remaining there until 1930.[8] During his run on the company, Mosconi advocated economic independence and starting in 1928, nationalization of oil supplies; the latter, however, was never achieved due to a 1930 military coup against Yrigoyen backed by, among others, foreign oil interests.[9]
YPF was privatized under president Carlos Menem and was bought by the Spanish firm Repsol in 1999; the resulting merged company was called Repsol YPF.
The renationalization of 51% of the firm was initiated in 2012 by President Cristina Fernández de Kirchner.[10] The government of Argentina eventually agreed to pay $5 billion compensation to Repsol.[11]
According to Bloomberg, the board of directors include Matteo Reggio and Miguel Gutiérrez.
History
Early development
The company, specializing in the exploration, production, refining and commercialization of petroleum, had its origin in 1907, when oil was discovered near the city of Comodoro Rivadavia in Chubut. Following World War I, oil had become an important resource, leading to struggles between rival powers to gain control of it.
YPF was created by
YPF bought its first
Mosconi, who had previously been in charge of the Aeronautics division of the
The first YPF
The
Oil nationalization became an important theme of Yrigoyen's electoral campaign of 1928, although the Yrigoyenistas focused their criticism on Standard Oil of New Jersey, abstaining themselves from attacking
Following Yrigoyen's victory in the
The Petroleum Institute (Instituto del Petróleo) was created on 30 December 1929, and directed by
Energy self-sufficiency
The coup was lobbied for chiefly by Standard Oil, whose interests in Salta Province and neighboring
This gain was partly offset by a 40% drop in private-sector output, however, such that overall oil production rose by only one-third during the Peronist decade while annual consumption nearly doubled to 70 million barrels. The nation's oil supply thus shifted from 60% domestic in 1945, to 60% imported by 1954. Oil imports by 1955 rose to US$300 million, or over one fourth of total merchandise imports.
An erstwhile critic of both the Drilexco and Standard Oil contracts, President Arturo Frondizi enacted policies in 1958 which granted foreign firms rental contracts by YPF over new wells to foster exploration and production. A key part of the developmentalist economic policy advanced by Frondizi, this policy was made with the caveat that oil and gas resources themselves would be renationalized. Thirteen contracts were signed with mainly U.S. firms, whereby each contractor would earn 40% of the revenues produced from the new wells.[24] Private production, which had virtually ceased, grew to become one third of the nation's total. YPF itself benefited by way of a royalty bonanza, which financed record investments. These in turn led a doubling of YPF production to 65 million barrels; including the private sector, Argentina's oil production thus nearly tripled to 98 million barrels by 1962, and despite higher consumption, imports fell to merely one sixth of total demand.[20]
These contracts created a controversy referred to by Frondizi himself as the "
Decline and privatization
Perón's return to Argentina and to the presidency in 1973 was followed by the addition of nearly 20,000 employees (YPF employed 53,000 by 1976).
The military government was openly hostile to YPF's paramount position in the oil industry, however. The company lost money every year after 1975 and by 1981 was US$4.1 billion in debt. YPF losses resulted, at least in large part, from policy decisions beyond its control. Government policy after 1976 kept oil prices well below inflation, with the consequence that costs increased faster than income. YPF also bore an extremely heavy tax burden, as 68.4% of its revenues were paid as tax to the national and provincial governments, as well as a long list of state agencies that included the National Energy Fund, the National Highway Council, and the Provincial Road Fund. Another serious drain resulted from the failure of other state enterprises such as Argentine Railways and the national airline to pay YPF for their fuel in full and on time. These intergovernmental accounts represented 20% of YPF's sales and were as much as ten years in arrears. The tax policy of the military government followed the same path as its civilian predecessors, a path that regarded YPF as a convenient source of funds to ease the country's chronic and serious fiscal deficit position.[26]
The death in a helicopter crash of the firm's director, Raúl Ondarts, and the appointment of General Guillermo Suárez Mason in 1981 was followed by a period of severe mismanagement, moreover. Powerful as head of the First Army Corps (which committed many of the "Dirty War" atrocities), Suárez Mason installed many of his hard-line Army Intelligence colleagues in managerial posts at YPF.[27] They in turn diverted large quantities of fuel into the director's newly established company Sol Petróleo, a dummy corporation used by Suárez Mason and his appointees for embezzlement as well as to divert funds to the Contras[28] and the fascist organization P2 (to which the director belonged).[29]
Suárez Mason had YPF borrow heavily not only to cover such
YPF nonetheless remained the 365th largest firm in the world,[32] with sales of over US$4 billion in 1992.[33] Argentine President Carlos Menem initiated the privatization of YPF through an IPO on the New York and other stock exchanges on 28 June 1993, at a value of US$3 billion for stock equal to a 45% share in the company. During the 18 months prior to the IPO, YPF underwent a massive restructuring process led by its new CEO José Estenssoro, who had been appointed by President Menem. The staff of YPF was reduced from 52,000 to 10,600 through layoffs agreed with unions and outsourcing of services to companies established by former YPF employees during the restructuring process. The financial bottom line for the company was increased from a loss about $1 billion in 1991 (although the accounting system at the time could not accurately compute actual profit) to a profit of $1 billion in 1993, and the underlying value of YPF was increased from about US$2 billion to the US$9 billion after privatization.[33][34]
Estenssoro stayed on as CEO, and further streamlined the company while expanding its reach outside Argentina, acquiring Maxus Energy Corporation of Dallas for US$740 million in 1995. Estenssoro died in a plane crash in Ecuador, where Maxus maintained wells, in May of that year.[35][36][37] His policy of high exploration investments was maintained by his successor, Nells León, and reserves expanded by 50% while production rose from 109 million barrels in 1993 to a record 190 million in 1998;[38] of the latter total, 32 million were produced by Maxus operations in Ecuador and elsewhere.[39]
Repsol acquisition
The Petersen Group (property of the Eskenazi family of Buenos Aires) entered into a partnership with Repsol in 2007 by acquiring a 15% stake in YPF; the group bought another 10% of the company for US$1.3 billion on 4 May 2011. A majority of the firm's shares (58%) remained under the control of Repsol, while 16% remained in private portfolios; the Argentine Government retained the golden share.[41] In 2014, Repsol exited the Argentine market, giving up its stake in YPF.[42]
Renationalization
Argentine international energy trade recorded an imbalance of US$3 billion in 2011, the first negative figure since 1987,
Citing Brazilian oil giant Petrobras as an example, the president announced the introduction of a bill on 16 April 2012, for the renationalization of YPF: the national government would purchase a controlling 51% share, with ten provincial governments receiving the remaining 49%. Planning Minister Julio de Vido was appointed to head the Federal intervention, replacing CEO Sebastián Eskenazi.[43] Repsol YPF CEO Antonio Brufau, Spanish Prime Minister Mariano Rajoy, and other Spanish officials objected to the nationalisation, accusing the Argentine government of driving down YPF shares ahead of the announcement (market price of the shares declined by over half from February to April). Economy Minister Hernán Lorenzino claimed in turn that asset stripping at YPF had financed Repsol's expansion in other parts of the world.[51]
Responses included a diplomatic offensive by Rajoy in other countries in the region,
The Chinese state oil concern, Sinopec, was reported to have been in talks to buy out Repsol's share in YPF – a potential deal scuttled by the Argentine announcement.[56] Both Repsol and YPF shares fell sharply before and after the announcement,[44] and the cost of insuring Argentine government bonds against default rose,[57] as did those of Spain.[58] Repsol Chairman Brufau estimated the company's potential loss at €5.7 billion (US$7.5 billion).[59]
The largest minority shareholder, the Petersen Group, had financed their initial purchase of 15% of the stock with a vendor's loan from Repsol for €1.5 billion.[6] The 2008 agreement required Repsol to buy back shares owned by the Group and to assume the loan should the Madrid-based firm lose majority control of YPF.[59] Sebastián Eskenazi indicated however that the group would forgo this option.[60]
The
Argentine Deputy Economy Minister Axel Kicillof rejected Repsol's initial demands for payment of US$10.5 billion for a 57% stake in YPF (the state sought 51%), citing debts of nearly US$9 billion.[63] The book value of YPF was US$4.4 billion at the end of 2011;[64] its total market capitalization on the day of the announcement was US$10.4 billion.[55] Repsol officials submitted the matter to the World Bank ICISD for arbitration.[65] The Argentine government and Repsol reached agreement in principle on compensation in November 2013, and on 25 February 2014, Repsol announced final agreement that the Argentine government would provide Repsol with guaranteed Argentine government bonds of varying maturities, the nominal amount varying to assure that Repsol would in fact receive US$5 billion in compensation for the 51% of YPF nationalized.[66]
YPF also acquired a controlling stake in Metrogas (the nation's largest gas distributor) in November 2012.[67] A joint exploratory venture for the development of tight oil and shale gas at the Vaca Muerta field was signed with Chevron Corporation on 16 July 2013.[68] Following its renationalization, rapidly rising investment levels at YPF have been funded mostly via internal financing, by Chevron, and by the periodic issuance of high-yield corporate bonds.[69] These bond issuances were raised to US$1.5 billion per series in April 2015, as demand surged to US$4 billion.[70]
In December 2019, the recently inaugurated President Alberto Fernández put Guillermo Nielsen in charge of YPF.[71] Nielsen was replaced by Pablo Gerardo González in January 2021.[72]
Reprivatization plans
President-elect Javier Milei stated after his election in 2023 that YPF was one of the state-controlled companies that he planned to privatize.[73]
Operations
The company remained the largest in its sector in Argentina despite declining production, operating 52% of the nation's refinery capacity in three facilities and 1,600 filling stations.[74] Its sales of gasoline and other motor fuels totaled 12.15 billion liters (3.21 billion gallons) in 2011, 57% of the national market in these.[75]
YPF shares of total output fell 8 points to 34% in oil, and 12 points to 23% in natural gas; its declines in output represented 54% of lost oil production and 97% in the case of natural gas.[76] The company's oil production had declined by a further 7%, and gas by 9%, during 2011.[77] Production declines of 6% annually under Repsol were reversed following the renationalization, however. Amid sharp increases in profitability and investment,[80][81] output in 2013 rose by 3.4% in oil and a 2.2% in gas,[82] and a further 8.7% and 12.5% in oil and gas, respectively, during 2014.[83]
YPF announced the discovery in November 2011 of an 8071 km2
The firm's new headquarters, the Repsol-YPF Tower, was designed by César Pelli and inaugurated in 2008.
Company statistics
Year | Petroleum output (million barrels) |
Natural gas output (billion cu ft) |
Petroleum reserves (million barrels) |
Natural gas reserves (billion cu ft) |
New exploratory wells[79] |
Net revenue (million USD) |
Profits after tax (million USD) |
---|---|---|---|---|---|---|---|
1992 | 101 | 493 | 1029 | 10918 | 17 | 4094 | 271 |
1993–95 | 130 | 423 | 1136 | 8965 | 82 | 4445 | 693 |
1996–98 | 182 | 490 | 1458 | 9812 | 34 | 5854 | 758 |
1999–2001 | 173 | 606 | 1592 | 10472 | 13 | 7806 | 842 |
2002–04 | 154 | 631 | 1255 | 7923 | 11 | 5974 | 1455 |
2005–07 | 127 | 651 | 677 | 4739 | 14 | 8544 | 1527 |
2008–10 | 111 | 544 | 601 | 3805 | 7 | 10531 | 1219 |
2011[75] | 100 | 441 | 583 | 3695 | n.a. | [64] 13795 | [64] 1289 |
Notes:[38] unless specified. Three year periods are averages. Output data from 1995 to 2011 includes Maxus Energy and other overseas units, typically around 20% of YPF's worldwide total. Exchange rate from IMF.
* excludes Maxus Energy.
See also
- Enarsa
- Bridas
- YCF
References
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