Tag Archive | "YPF"

Argentina News Roundup: 10th April 2014

Puente Pueyrredón was one of the main access routes into Buenos Aires that was cut during today's national strike (photo: Carlos Brigo/Télam/dsl)

Puente Pueyrredón was one of the main access routes into Buenos Aires that was cut during today’s national strike (photo: Carlos Brigo/Télam/dsl)

National Strike a ‘Success’: Today’s general strike, which took place across the country, has been deemed a “success” by the organisers, opposition factions of the umbrella CGT and CTA unions. Transport services were disrupted on a national level as subtes, trains, and both urban and long-distance buses around the country went on strike, and flights were also affected. Around 40 pickets were set up on roads around the country, including the main roads into Buenos Aires, disrupting traffic that attempted to enter the capital. As a result of the country-wide disruption to transport services, classes were suspended, despite the teachers’ unions not being involved in the strike, and in the cities of Buenos Aires, Córdoba, Rosario, and Mendoza, a large number of people didn’t go to work – either because they actively participated in the strike or due to not being able to physically get there. Whilst the strike was mostly peaceful, although some violent incidents were noted, including two separate attacks on Mar del Plata taxi drivers who continued to work today. In San Luis a municipal inspector has been hospitalised after being hit by a truck, after some “incidents” were noted in the bus station belonging to Transpuntano. It is not yet clear if the two events were related.

Massive Drug Raid by Police in Rosario: More than 3,000 federal security officers were involved in a massive operation against drug trafficking in Rosario yesterday. According to Security Secretary, Sergio Berni, it was “the biggest operation in the history of Argentina”, which involved officers from the Federal Police, Gendarmes, Coast Guard, and Airport Security Police. Underground tunnels were found in various zones of the city, thought to have been used by drug traffickers to escape authorities. Twenty people were arrested after raids on around 100 houses, where at least 1,000 doses of cocaine and paco were found. The operation, which took months of planning, was hailed a success by Berni, and a first necessary step to unravelling the drug web the city is entangled in. He went on to say that around 2,000 officers – 1,500 Gendarmes and 500 Coast Guard officers – will remain in the city for the coming months to reinforce the local security forces and help in the “pacifying” of the city, which has been marred in recent years by increasing levels of violence tied to drug trafficking. In related news, seven high-ranking police officers from the city’s Judicial Division have been relieved of their duties after being accused of having ties to the city’s drug ring.

Chevron Ratifies Vaca Muerta Development Plan: Oil giant Chevron has decided to continue its partnership with YPF to advance the development stage of extraction of the massive shale gas deposits in Vaca Muerta, Neuquén. The plan includes the perforation of 170 new wells this year, and a joint investment of US$1.6bn. The pilot project, which was developed until March, included the development of an area of 20km2 and the drilling of 161 wells. Now the site will be expanded to develop an area of 395km2, including more than 1500 wells, capable of a daily production of 50,000 barrels of oil and 3m cubic metres of natural gas. The total area of the Vaca Muerta field is around 30,000km2. It was also announced that YPF and Chevron have reached a new agreement to explore in Narambuena, a 200km2 region also in Neuquén.

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Argentina News Roundup: 27th March 2014

The senate debate the government's agreement with Repsol (photo: Fernando Sturla/Telam/ddc)

The senate debate the government’s agreement with Repsol (photo: Fernando Sturla/Telam/ddc)

Senate Ratifies Agreement with Repsol: Last night, Argentina’s senate approved the agreement met between the government and Repsol over 2012′s expropriation of 51% of YPF‘s shares from the Spanish oil giant. After 11 hours of debate, the senate passed the bill with 42 votes in favour, 18 against and 8 abstentions, paving the way for the ratification of the law. Repsol and the government of Cristina Fernández de Kirchner signed the settlement on 27th February, which consists of a fixed package of three types of sovereign bonds with a nominal value of US$5bn, and a complementary package of three other bonds worth a maximum of US$1bn, to cover any reductions in the market value of the first package. The agreement will allow the government to move forward with investments in YPF, bringing the two-year quarrel with Spain to an end. 

Reduction in Gas and Water Subsidies: Economy Minister Axel Kicillof has announced that the government is rolling back gas and water subsidies for households and businesses, with the money re-diverted to government social programmes Asignación Universal por Hijo and Progresar. Industries will be exempt from the new plan, which aims to promote “responsible consumerism”. In general terms, the cuts will of be around 20%, but in the cases of the highest consumers, the subsidy reduction for gas could reach 80%. For water, around 65% of households will have their subsidies reduced by $1-2 pesos per day, with the other 35% seeing an increase of $2.60 per day, based on neighbourhood. The partial removal will be rolled out over the coming months, with the full subsidy reduction in place by 1st August. Kicillof confirmed that those who already receive government benefits, such as social programmes, will continue to have their utilities bills subsidised.

FAO: “Zero Hunger Targets Met”: According to a report released by the UN’s Food and Agriculture Organisation (FAO), Argentina has met its target of ‘zero hunger’. The report, entitled ‘Hunger in Latin America and the Caribbean: Approaching the Millenium Targets’, data shows that the country, along with Venezuela and Chile, have met their goal of lower than 5% hunger. The government programme Asignación Universal por Hijo, a government allowance for low-income families whose children go to school, which was last year extended to include an allowance for pregnant women, is highlighted as being a fundamental pars of the reduction in hunger. Such policies are commended as being a more “complete” approach to tackling hunger, as they act as a compliment to other household incomes, allowing for the basic levels of food consumption to be met. The programme covered 3.5m people in 2012, costing the country almost US$2m.

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Argentina News Roundup: 13th March 2014

US Secretary of State John Kerry (photo courtesy of Wikipedia)

US Secretary of State John Kerry said the US would not back Argentina on holdouts (photo courtesy of Wikipedia)

United States won’t back Government on Holdouts: US Secretary of State, John Kerry, has rejected the possibility that the US government would side with Argentina in the dispute over the holdouts on 2001-2 debt payments. Responding a Republican congressman’s question over whether the State Department would take a stance in favour of Argentina if the court required an opinion, he said “No, we wouldn’t”, going on to say that the US would continue pressuring Argentina to pay its creditors, both the public and private ones. He made particular reference to the US$600m that Argentina owes the US State – part of the US$9bn Paris Club debt – saying: “I’ll do everything in my power to get it back, as will the State Department.” The response comes as a blow to Argentina’s government, who had speculated that the Obama administration’s official position would back Argentina, with even Foreign Minister Héctor Timmerman have publicly mooted US backing. 

Pope Francis Celebrates 1st Anniversary: Today marked the one year since the Vatican nominated Cardinal Jorge Bergoglio of Buenos Aires to be the 266th pope, who took the name Pope Francis. The leader of the Catholic Church marked the day by tweeting “Pray for me”, a phrase he used when making his first appearance as pontiff, on the central balcony of St Peter’s Basilica a year ago, and one he often used as the end of discourses when in Argentina. Cabinet Chief Jorge Capitanich said that today “is a very important day for Argentina”, speaking of a “revolution of being“, and of the transformation of “spiritual leadership of Catholics and non-Catholics in the world”, highlighting that Pope Francis is the first Argentine and Latin American pope. In celebration of the anniversary, Buenos Aires metropolitan cathedral will hold a special mass today at 8pm, presided over by his successor, Cardinal Mario Poli.

Head of YPF Talks of Energy Revolution: Head of YPF, Miguel Galuccio, today said that Argentina has the energy reserves to not only recuperate energy supply, but to also undergo an “energy revolution”. He said that the country must decide if it wants to be “energy independent or dependent”, highlighting the recently discovered oil reserves, and also the country’s vast gas fields. He went on to highlight that since the government expropriated the company from Spanish oil giant Repsol in April 2012, investment has risen 130% and net profit 45%. The announcement comes at a time when other countries in Latin America are beginning to invest more in renewable energy, something that has dropped dramatically in Argentina – falling from US$500m to US$90m between 2012 and 2013 – since the discovery of more oil and gas reserves over the past couple of years.

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Argentina News Roundup: 11th March 2014

Police at the scene of the clash (photo: Tito La Penna/Télam/dsl)

Police at the scene of the fight (photo: Tito La Penna/Télam/dsl)

One Dead in Union Clash: One person was killed and another hospitalised as a result of a fight between rival union factions this morning. The incident occurred at a work site in Villa Fiorito, Greater Buenos Aires, and involved members from the construction workers’ union (Uocra). Darío Avalos, 39, died of a gunshot to the chest, whilst another person was taken to the Evita Hospital in Lanús, where he remains in a critical state. After the fight, the police arrested four people who were carrying slingshots, metal bars, and knives. According to Télam news agency, Uocra delegate Guillermo Santillán indicated that the fight started when a group of workers went to the site to ask for work and were attacked by people on the inside. Other sources believe today’s incident could be a revenge for a similar confrontation that took place ten days ago, where eight people were wounded.

YPF Finds New Oil Reserves: Oil company YPF announced the discovery of an oil field in the province of Río Negro expected to yield 15m barrels of crude. In a statement released today, the state-controlled company informed the reserves were found in the oil well Los Caldenes x-2, 30km north of the city of Cinco Saltos. “This new finding, together with others that were recently announced, is a landmark for YPF’s new management, since it will allow us to develop a new oil field, increase the production of conventional oil, and generate growth and development for the provinces involved and for the country,” said the statement. The exploration block had been inactive since 1999.

Football Violence Leaves Ten Wounded: Ten people, including three policemen, were wounded in a brutal fight that broke out just before a football match yesterday evening. The incident took place at around 7pm, before a match between Quilmes and All Boys, when a faction of the Quilmes barra brava attacked a “dissident” group in order to “gain control” of the stands in the club’s stadium. The rival factions used knives, metal bars, and flag poles as weapons. Mario Becerra, the son of the leader of the “dissident” faction, was left fighting for his life when he was kicked and beaten up as he was lying unconscious on the ground. Three people were arrested on the spot, and it has been reported that three barras who were taken to hospital escaped today before being discharged, whilst one remains handcuffed to his bed. Quilmes coach Ricardo Caruso Lombardi said about the incident: “It was a mess, we had no idea of what was going on. We were about to get to the stadium and we heard about what had happened,” adding that “this is bad for the football scene, we have a sick society where everyone wants to solve everything fighting and look how it all ends.”

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Argentina News Roundup: 25th February 2014

The former Repsol-YPF tower in Puerto Madero (photo: Wikipedia)

The former Repsol-YPF tower in Puerto Madero (photo: Wikipedia)

Repsol Agrees To US$5bn Settlement With Government Over YPF Takeover: The board of directors at Spanish oil company Repsol today accepted a US$5bn compensation from the government for the expropriation of its assets in Argentina following the nationalisation of YPF in 2012. According to a Repsol press release, the settlement consists of a fixed package of three types of sovereign bonds with a nominal value of US$5bn, and a complementary package of three other bonds worth a maximum of US$1bn, to cover any discounts in the market value of the first package. The agreement will only be finalised after it is approved by Repsol shareholders at the Annual General Meeting in March, and ratified by the Argentine Congress. As part of the settlement, which is around half the US$10.5bn originally demanded by Repsol, the company will drop all legal action brought against Argentina.

Murder and Tension After New Villa Lugano Occupation: A man was killed in a dispute last night as around 200 people occupied a piece of land near the Parque Indoamericano in the neigbourhood of Villa Lugano. Osvaldo Soto, 30, was shot as families marked out informal lots in a police vehicle impound on the outskirts of the Villa 20, in the south-western corner of Buenos Aires. The settlers are demanding land to build property, claiming the city government has failed to deliver on promises of social housing. Secretary of Security Sergio Berni met with representatives of the settlers today, but no agreement has been reached yet. Berni criticised Buenos Aires public prosecutor Carlos Rolero for not responding to calls last night or ordering police to evacuate the police property before more people moved in. Rolero said later that he was seeking a peaceful resolution, and said that the Metropolitan Police has not been given an order to remove the settlers by force.

In December 2010, around 5,000 informal settlers occupied the Parque Indoamericano for several days, leading to a stand off between Federal and Metropolitan police forces and violent clashes that left three dead.

Construction Worker Killed in Building Collapse: The collapse of a building site in the Buenos Aires neighbourhood of Balvanera this morning killed one construction worker and injured another four. The construction workers’ union UOCRA said in a statement that the building site had been reported to the city government on 12th February for “multiple breaches” of work safety regulations. “Unfortunately, the lack of responsibility by the business and lack of action by the controlling authorities, in spite of warnings by UOCRA, have once again combined to take the life of workers,” said the union.

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Oil Companies Implement First Petrol Price Increases Since April

YPF logo (Image/Wikipedia)

YPF logo (Image/Wikipedia)

Oil companies YPF and Shell today raised the price of their petrol by between 6% and 7.5%. The price increase came into force at midnight yesterday and marks the expiration of resolution 35/2013, a measure introduced in April 2013, by the domestic trade secretary’s office, which imposed maximum prices on petrol.

The price increases mainly affected petrol and diesel in the premium sector.

YPF announced an national average price increase of 6.5% but stated that even with this change their prices were still “the lowest in the market.” The price of petrol in YPF stations in Buenos Aires is now $8.34 for a litre of ‘super’ petrol, $9.29 for a litre of premium petrol. The cost of diesel 500 has risen to $7.62 and the premium ‘Euro’ diesel to $8.57. In the province of Buenos Aires the prices increased by between 2% and 6.5%, depending on the product.

“A litre of petrol is never more than $10,” assured YPF. However, in Córdoba the price of a litre of premium petrol has climbed to $9.99. In spite of these new increases it is estimated that YPFs prices have not increased more that 25% this year, a figure which is below the the price increase of crude oil in the local market which stands at 39%.

YPF attributed the price increase to the rising price of crude oil and 25%-30% on the rise in salaries.

Meanwhile, oil company Shell also increased its prices by between 6%-7.5%, with the premium V-Power petrol reaching $9.66 per litre and the price of their ‘super’ petrol rising to $8.83. The company Axion, formerly Esso, also revealed today that they would be increasing their prices by an average 6%. Although Petrobras and local company, Oil, have not yet announced price increases, they are expected to do so soon.

The president of the Fuel Organisation Federation in the Province of Buenos Aires, Luis Malchiodi, said the price increases were “a necessary adjustment” in order to meet the profit margins in the sector.

New cabinet chief Jorge Capitanich said the price hike had already been arranged, but added that a new round of negotiations was underway to prevent an upward spiral in petrol prices.

To compensate the increase in prices, the oil companies have committed to increasing production through new investments.

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Argentina and Spain Reach Preliminary Agreement on YPF

Chief of Cabinet Jorge Capitanich today discussing the YPF agreement during a press conference (photo: Daniel Dabove/Télam/lz)

Chief of Cabinet Jorge Capitanich today discussing the YPF agreement during a press conference (photo: Daniel Dabove/Télam/lz)

The Spanish Industry Minister, José Manuel Soria, and the Argentine Economy Minister, Axel Kicillof, met today in Buenos Aires, along with Repsol and YPF officials, to discuss a compensation agreement for the Spanish-owned energy company after its expropriation of YPF shares.

In April of last year, the Argentine government announced plans to re-nationalise YPF, with 51% owned by the state and 49% in private hands. A large part of Repsol’s share in the company was expropriated in a move that was heavily criticised by the European Union and the Spanish government.

The two countries have been trying to reach a solution through compensation since, with Repsol claiming at one point that their share was worth US$10.5bn, although Argentina rejected this figure.

According to sources in the Ministry of Economy, an initial agreement for compensation has been reached, although this is subject to ratification by Repsol officials. It appears that under the preliminary agreements to be considered on Wednesday by Repsol, the Spanish company would receive money in Argentine bonds in US dollars. Argentina is also asking Repsol to drop legal action against the country for expropriating its controlling stake in YPF.

It is reported Argentina has offered Repsol US$5bn in compensation. Repsol’s shares have gone up by 4% since the news.

In a written statement, Kicillof said he hoped the agreement between the parts would “contribute to normalise and strengthen the historic ties [between them].”

YPF was founded in 1922 under the administration of president Hipólito Yrigoyen and was the world’s first state-owned oil company.

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Secret Clauses in Vaca Muerta Agreement Revealed

On the right: Ali Moshiri Chevron CEO for South America. On the Right : Miguel Galuccio, YPF CEO during a meeting in Neuquen for Vaca Muerte. (Photo : Press YPF/Télam/aa)

Miguel Galluccio, YPF CEO (lef) with Ali Moshiri, Chevron South America in Neuquén. (Photo: Press YPF/Télam/aa)

The New York Times has revealed several ‘secret clauses’ in the contract between the US oil company Chevron and Argentina’s YPF over the exploitation of the Vaca Muerta site in Neuquén.

The deal, to exploit shale gas and oil using the controversial technique of ‘fracking’, has sparked local resistance from when discussions first began, right up until the deal was given the go-ahead at the end of August.

The latest revelations have led to claims that the Argentine government has tried to keep secret certain parts of the agreement, three so-called ‘secret clauses’:

Firstly, in the case of the contract not being respected, or any breaches or disputes of the same, jurisdiction over how the issue is resolved is not in Argentina, but in the city of New York.

Secondly, in the case of a disagreement or conflict between Chevron and YPF, any legal action will not be taken through Argentine courts but through the International Court of Arbitration of the International Chamber of Commerce, whose headquarters are in France.

Finally, in the coming weeks, YPF will deposit some US$100m into a US bank account as a guarantee that Chevron will eventually receive future profits from the venture.

CEO of YPF, Miguel Galluccio, has acknowledged the presence of the first two clauses, but the third is as yet unconfirmed.

In addition to this, if Chevron invests US$1.2bn – the figure being touted as their potential investment – the corporation can back out after 18 months with no penalty, will continue to receive around 50% of the profits from production from these wells, forever.

Neuquén governor Jorge Sapag has publicly stated that he had never had access to the confidential clauses that the companies negotiated.

Argentine oil officials have defended the agreement, saying it protect Chevron from financial loss linked to a change in political winds.

Editor’s Note: After the news about these clauses were published by the New York Times and picked up by the local press, YPF released a statement denying such clauses were secret. In their statement, they informed that the company’s chief executive, Miguel Galluccio, had alluded to the conditions specified in the contract between YPF and Chevron during a press conference on 29th August.

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Government Gives YPF Rail Service to Vaca Muerta

The Minister of Interior and Transport Florencio Randazzo and CEO of YPF Miguel Galuccio this afternoon. (Photo: Telam)

The Minister of Interior and Transport Florencio Randazzo and CEO of YPF Miguel Galuccio this afternoon. (Photo: Telam)

Progress is being made towards drilling for oil and shale gas in Neuquén, with the government today pledging oil company YPF with a rail service, including 81 carriages and two locomotives to transport goods and equipment between the port of Buenos Aires and Plaza Huincul to develop the oil field Vaca Muerta.

The minister of Interior and Transport, Florencio Randazzo, the president of Belgrano Cargas, Marcelo Bosch, and CEO of YPF, Miguel Galuccio, this afternoon signed an agreement to provide the partially re-nationalised company with its own rail service.

“This is linked to one of the issues that we have been given by the president (Cristina Fernández de Kirchner), which is lower operating costs” of transport, Randazzo said after signing the agreement at the YPF headquarters in Puerto Madero.

The choice of rail is an alternative to using trucks, by far the most common form of cargo transport in recent years. The country’s main truck drivers union, the Camioneros, has an uneasy relationship with the Casa Rosada.

During the meeting, the minister stressed that “the rail service has a much lower cost than the truck, between 25 and 35%.”

Gallucio said it was important to invest in infrastructure to transport the materials used in drilling, in this case large quantities of sand, to the site at a competitive price.

“The development of Vaca Muerta requires long term vision, to transform the country’s energy paradigm,” he said.

YPF has an agreement with Chevron to develop the Vaca Muerta shale oil field and is negotiating to include Mexican oil company Pemex in the exploration as well.

Twenty-eight people were injured in protests in August when the Neuquén provincial legislature cleared the way for a controversial YPF-Chevron oil development project.

The Vaca Muerta oil field, measuring 30,000km2 is considered to be one of the world’s largest reserves of unconventional gas and oil.

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Speculation Builds Over YPF-Repsol Deal

Miguel Galluccio

YPF CEO Miguel Galuccio (Photo: Wikipedia)

Speculation of an agreement between YPF and Repsol to compensate for the partial re-nationalisation of YPF last year has driven share prices upwards.

Yesterday, YPF CEO Miguel Galuccio said he expected to reach a solution to the conflict between Argentina and Repsol by the end of the year, after meeting with Spanish Industry Minister José Manuel Soria and Repsol shareholders in Madrid on Wednesday.

Speaking to media in Madrid, Galuccio said: “Before the end of the year there will be a solution one way or another.”

Despite confirmation from Spain on a possible deal, at midday on Friday YPF shares on the Buenos Aires stock exchange rose by 6.3%, to $195, while the market in New York grew by 6.5% to US$21.52.

Currently on the table is US$5bn of assets, including a deal to develop shale gas assets in Vaca Muerta in the province of Neuquén.

Galuccio signalled that the alternative to negotiation is to take the legal route – which could award Repsol just US$1.5bn; the value given by the Argentine Tribunal de Tasación as appropriate compensation.

“It could be this figure,” Galuccio said.

According to El País, Repsol considers the proposed figure of US$1.5bn a joke, leaked to the press by the Argentine government. The corporation is seeking compensation to the tune of US$10.5bn, the value it has given its stake. In June, Repsol’s board voted unanimously to reject Argentina’s US$5bn compensation offer, stating it “did not reflect Respol’s loss.”

According to La Nación, the Spanish government is reported to believe that Galuccio “brought nothing new” during his visit to Madrid, fuelling speculation that Galuccio’s announcement was a ploy to drive up share prices.

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