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Montevideo, November 16th 2018 - 03:22 UTC

YPF defends Chevron partnership; court orders investigation into accord with the US oil giant

Friday, May 16th 2014 - 09:25 UTC
Full article 7 comments
According to the ruling, Cristina Fernandez committed “abuse of authority, breach of public duty and potential environmental damage” According to the ruling, Cristina Fernandez committed “abuse of authority, breach of public duty and potential environmental damage”
CEO Galuccio: YPF needs foreign investment; accord was signed by YPF, not by the president CEO Galuccio: YPF needs foreign investment; accord was signed by YPF, not by the president

Argentine state-controlled oil company YPF on Thursday defended the partnership deal it reached with one of the world's largest energy corporations, Chevron Corp., two days after a court ordered a probe into alleged irregularities associated with the pact.

 Argentine state-controlled oil company YPF on Thursday defended the partnership deal it reached with one of the world's largest energy corporations, Chevron Corp., two days after a court ordered a probe into alleged irregularities associated with the pact.

“We have to avoid a short and narrow-minded view of reality. The long term and strategic vision cannot be just a matter of words. Without energy, there is no possibility for the sustainable development of Argentina,” YPF CEO Miguel Galuccio said in a letter published Thursday in the Argentine media.

A federal court this week ordered an investigation of President Cristina Fernandez for alleged abuse of authority in connection with YPF's pact with Chevron to develop the massive Vaca Muerta shale formation.

It handed down the ruling in response to a complaint filed last year against a decree issued by Cristina Fernandez, who allowed energy companies that invest at least 1 billion dollars over five years to avoid export taxes on up to 20% of their oil and gas output.

YPF said this week's court ruling did not question the project to develop Vaca Muerta but merely “formal matters” related to the pact.

“Argentina needs to attract significant investment” in order to capitalize on its resources and must choose between buying energy from third parties - which involves sending foreign currency abroad, at the risk of accentuating the devaluation of the peso - or inviting “the world's leading companies” to invest in the country, according to Galuccio.

“The president understood that what's at stake are our future generations and entrusted this mission to us,” the YPF boss said, adding that Argentina currently ranks second globally in terms of growth of non-conventional energy production.

“YPF signed the agreement with Chevron, not the president,” Galuccio said, while also praising the government's strategy of striving for energy self-sufficiency.

A federal appellate court in Buenos Aires on Tuesday overruled a decision by lower-court prosecutor Eduardo Taiano, who had dismissed the complaint filed by opposition lawmakers against Cristina Fernandez for “abuse of authority, breach of public duty and potential environmental damage.”

The complaint referred to the pact signed on July 16, 2013 - just a day after the decree, between YPF and Chevron for a pilot program in the Loma Campana area, part of the Vaca Muerta shale formation.

That pilot stage involved an investment outlay of 1.24 billion dollars to drill 161 wells and develop a 20-sq.-kilometer area. The second phase of the Vaca Muerta project will involve drilling some 1,500 wells to develop a 395-sq.-kilometer area.

With that expanded effort, the companies expect to achieve daily production of 50,000 barrels of oil and 3 million cubic meters of associated natural gas. Current production at Loma Campana stands at 20,000 barrels of oil equivalent per day.

Top Comments

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  • Briton

    Poor CFK,
    its collapsing around her,
    still,
    she will be gone soon and forgotten about.

    May 16th, 2014 - 10:57 am 0
  • ChrisR

    Galuccio knows full well that the ONLY way other oilmen will meet with him is if he can drum up some wheeze like this.

    And as for “that could end up as G12, of presidents of state owned companies” is he trying to get TMBOA at the table?

    Are there 12 presidents that have state owned oil companies? I do hope not.

    May 16th, 2014 - 04:37 pm 0
  • La Patria

    One day CFK's government denies any notion of corruption, the next a court opens investigations into her abuse of authority involving a deal.........you couldn't make it up!

    May 17th, 2014 - 01:44 am 0
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