Energy
Macri Ends His Term Leaving State Oil Company YPF in the Red
Peronists candidates Alberto Fernández and Cristina Kirchner discuss who will head the most important company in Argentina.

Aware of the crisis facing Argentina's state-owned oil company YPF, the team of Peronist candidate Alberto Fernandez plans to focus the company's scarce resources to oil and gas production, leaving the business of electricity and renewable energy in second place. A strategy that clashes with the plans of his ally and VP candidate, former President Cristina Fernández de Kirchner.

The Frente de Todos, the electoral alliance headed by Fernández and Kirchner that could snatch the government from Mauricio Macri later this month, commissioned a report to better understand the financial state of the oil company. What they found was worse than expected.

Throughout Macri's mandate, investment fell by 44 percent, the company income fell by 14 percent, earnings before taxes and amortizations (EBITDA) by 23 percent, and gas and oil production by 18% and 10%, respectively, according to the numbers made available to this outlet.

The company's debacle hinders the ambitions of YPF president Miguel Gutiérrez, who hoped to stay as CEO in an eventual Peronist government. The executive began to criticize Macri and approached the state governors to improve his chances, as revealed by La Nación. However, sources close to Cristina Kirchner told LPO that "Gutiérrez is in the past".

Alberto wants to apply the U.S. security model to combat insecurity

The name that is most mentioned within Peronism to assume the direction of the oil company is that of Guillermo Nielsen, although there is also talks of a possible return of Miguel Galuccio who is in constant dialogue with Cristina Kirchner. They recently met in Cuba.

Galuccio and the former President are working on a plan to rescue the country's main energy producer that will arrive in a delicate situation on December 10, after the effects of Macri's gas price controls plan will be known. YPF's debt level is 2.7 times higher than its income flow and in a financial context with all markets closed there are not many possibilities to face an aggressive investment plan.

Macri's Chief of Staff Marcos Peña and the current president of YPF, Miguel Gutiérrez in Vaca Muerta.

However, Alberto Fernández's team considers it vital to increase those numbers. His team is considering new strategic alliances between YPF and first-class foreign companies, as it happened with Chevron during the Galuccio administration.

"The big shale projects are inherited from the previous administration. Partnering with non-traditional actors in Vaca Muerta is key. The same is true for LNG projects and the industrialization of shale gas in the petrochemical and chemical industry," explained Oetec director Federico Bernal, who is working with Sergio Lanziani, the main candidate for the Energy Secretariat.

This is the reasons why the Peronist do not rule out opening the market to Chinese and Russian oil companies, a very delicate subject that touches geopolitical aspects and of course, it would impact the relationship with the White House, but it could bring fresh dollars to start this ambitious investment plan.

 Vista's president and former YPF head Miguel Galuccio. 

The proposal will target all the players in the market and, to increase the enthusiasm, Guillermo Nielsen has a whole team working on the development of a new bill to provide tax incentives and guarantee legal certainty to the eventual investors.

This is a fundamental step to ensure a double flow of foreign money to alleviate the worrying lack of dollars in the Argentine economy: the first income through investments that will later reach the goal of exporting an additional 40 billion dollars in hydrocarbons, as envisioned by Matías Kulfas.

On the other hand, they insist that it is necessary to stop distracting resources in other areas that the government was forced to get into. "Not only was YPF abandoned by the Macri administration, but it was divorced from its fundamental role. It was diversified into renewables and electricity when its participation in the producing provinces shrank sharply. It has to return to its role as a witness, protagonist company. To turn massively to conventional hydrocarbons and shale," Bernal added.

Alberto wants Kulfas as head of the Treasury

The current management of the company assured LPO that the electricity subsidiary YPF Luz has other partners and does not take funds from YPF, so it does not divert capital from the main company. But the fact is that it is an aspect that generates problems even within the partners of the ruling party, such as former Secretary of Energy Jorge Lapeña.

"When the news is that we are going to place a power plant in Tucumán and not that we have discovered an important deposit on the continental shelf, I see a company making a mistake," he warned in an interview. 

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