The CEO of Argentine state-run oil firm YPF expressed confidence Thursday in the company's future and urged multinational corporations to come on board as partners and help finance part of its $37.2 billion five-year plan.
In his first press conference since taking over the firm on May 7, Miguel Galuccio acknowledged that some international investors may be "reluctant" to place their trust in YPF after the Argentine government confiscated a 51 percent stake in the company from Spain's Repsol, which retains a 12 percent interest.
"It's clear the dispute with Repsol will influence certain investors' decision to partner with YPF, but not in every case. It could play a role in some instances, but it won't have an impact on others. We're sufficiently attractive," the CEO said.
Galuccio, 44, said the "fear will dissipate over time" as the company shows good results and continues to give "coherent signs."
He defended the move to expropriate 51 percent of originally state-owned YPF, but said that seizure was a unique case and "there's no generalized nationalization trend" in Argentina.
"We need strategic partners," the petroleum exploration expert said, adding that U.S. supermajor Chevron is one of the companies interested in teaming up with YPF to develop Vaca Muerta, a massive reserve of shale gas and oil in western Argentina.
Prior to the stake seizure, Repsol had come under criticism by Argentine authorities for inadequate investment in oil and gas exploration by YPF.
Repsol Chairman and CEO Antonio Brufau, for his part, said after the expropriation move that the recent discovery of Vaca Muerta was undoubtedly behind the move to seize control of the firm.
Galuccio also provided details Thursday of YPF's 2013-2017 investment plan, noting that 72 percent of the funds will be allocated for production, 22 percent to refining and marketing and 4 percent to exploration.
Galuccio said the $37.2 billion plan is "ambitious and realistic" at the same time because YPF has the ability to finance itself, a solid portfolio of projects and "the capability to attract partners."
He said 80 percent of the plan will be funded by cash flow from operations and the rest through debt and contributions from an international partner in Vaca Muerta, one of the world's biggest shale oil and gas reserves with roughly 22.8 billion barrels of oil equivalent according to U.S.-based auditor Ryder Scott.
The chief aim of the plan is to stem YPF's output decline and then boost production further until Argentina is once again a net fuel exporter.
In the same press conference, Galuccio announced that YPF had discovered a new reserve of shale gas and oil.
That find was made in the D-129 area of the southern provinces of Chubut and Santa Cruz, he said, noting that the new reserve is geologically separate from Vaca Muerta.
"We've perforated a new mother rock in Argentina. It's the first time we've perforated a mother rock other than Vaca Muerta," Galuccio said, adding that the three wells where the discovery was made have shown "great productivity."
The CEO also announced Thursday that two other new shale oil and gas finds were made in Vaca Muerta, also with "very good productivity." EFE