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World

Head of Argentina's YPF oil firm resigns in government restructuring

Mauricio Macri has been purging top officials associated with the former leftist government

File photo of Galuccio, CEO of YPF, during the IHS CERAWeek 2015 energy conference in Houston
By Reuters Whatsapp Twitter Facebook Share
2 years ago

BUENOS AIRES – The head of Argentina’s state-controlled oil firm, YPF, is resigning amid a purge by the country’s new president, Mauricio Macri, of top officials associated with the former leftist government.

YPF said Chief Executive Officer Miguel Galuccio, who will also step down as chairman, would remain in his post until the next shareholders’ meeting at the end of April.

State-run news agency Telam said on Wednesday that Galuccio was asked by the government to step down “due to a restructuring” at the company.

Shares in YPF closed down 3.27 percent on Wednesday at 275.20 pesos ($17.91), dragging the benchmark Merval index lower.

Galuccio was appointed in 2012 by then-President Cristina Fernandez after she seized control of the company from Spanish oil giant Repsol.

But the executive, who signed exploration deals with Chevron Corp, Malaysia state oil firm Petronas and a framework agreement with Russian state-owned gas producer Gazprom to exploit the Vaca Muerta shale formation, was well respected on Wall Street.

“We can only think the new management will be equally or more pro-shareholder than before,” said Maria Negrete-Gruson, a portfolio manager at Artisan Partners.

She added that with the guarantees of Macri, who took office in December, to adopt a more hands-off approach, YPF would “have more potential for international partnerships” to develop Vaca Muerta.

The Energy Ministry said in a statement it would split Galuccio’s two roles and search for a new chief executive at home and abroad, but gave no names of potential candidates.

“Time has come to allow others to continue the path that the company is on,” Galuccio said in a statement.

Miguel Galuccio, chief executive officer of Argentina's state-controlled energy company YPF, looks on in Buenos Aires, Argentina, in this April 16, 2015 file photo. Galuccio has resigned on Wednesday at the request of the government, the company said, as the country's new leader continues to get rid of officials who defended the previous president's interventionist policies. REUTERS/Enrique Marcarian/File

Miguel Galuccio, former chief executive officer of Argentina’s state-controlled energy company YPF, will step down, as the country’s new leader continues to get rid of officials who defended the previous president’s interventionist policies. Photo: Reuters/Enrique Marcarian.

YPF last week reported a fourth-quarter loss and said it would reduce capital expenditures by 20 to 25 percent in 2016 as the global rout on oil prices hit.

Macri is hoping to attract foreign investment, especially in the energy sector. Argentina sits atop one of the world’s biggest shale oil and gas formations, but foreign companies were scared off by Fernandez’s policies.

U.S. President Barack Obama will make a state visit to Buenos Aires later this month to discuss topics including energy. Fernandez had a frosty relationship with Washington, but bilateral relations have thawed since Macri’s election.

Argentina pulled in less than one-quarter of the foreign direct investment that went to Chile in 2014 and less than half the amounts that went to Uruguay and Colombia, according to the United Nations.

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