CEO of Argentina’s Biggest Oil Company ResignsBy and
Chairman becomes virtual CEO of Argentina’s biggest company
Six-person committee, Gutierrez take over Darre’s duties
YPF SA Chairman Miguel Angel Gutierrez, a former JPMorgan Chase & Co. banker, won the battle to control Argentina’s biggest energy company after Ricardo Darre resigned.
Darre, who lasted 13 months as CEO, will be replaced by a six-person committee and Gutierrez, Buenos Aires-based YPF said in an emailed statement. Only two of the six people on the new leadership board have experience in oil drilling.
"We are starting a new phase of YPF," said Sebastian Mocorrea, one of the members of the committee, by phone from Buenos Aires. "The focus will be on achieving greater efficiency in oil and gas production and becoming an integrated-comprehensive energy company, with a strong development of our business in the electricity sector, including renewable energy projects. "
Darre’s exit shows that experience in oil drilling isn’t necessary to lead Argentina’s state oil producer, especially as the company focuses on growing other businesses, including electricity generation. Argentina wants to boost renewable energy consumption to 20 percent by 2025 and reduce its dependence on crude oil while expanding natural gas production.
Darre came to YPF in July last year from Texas, where he was the head of the U.S. exploration and production unit of Total SA, in order to speed up development of Vaca Muerta, the world’s second-biggest shale deposit. Since being appointed in 2016, Gutierrez has slashed the company’s capital expenditure to almost half its peak of $7 billion, slowing Darre’s efforts.
“The company will have to be increasingly efficient so that investments will be feasible and the debt won’t be excessive,” Carlos Aszpis, an analyst at Buenos Aires-based brokerage Schweber Securities SA, said by phone. “In this context, there’s also the possibility, to a greater or smaller degree, to reduce part of the debt through the sale of assets.”
Miguel Galuccio, an experienced oil driller who served as CEO and chairman, left the company in March 2016. Gutierrez was named chairman the next month and Darre CEO in July 2016. Gutierrez is still a partner at TRG Management LP, which provides investment advisory services. Former President Cristina Fernandez de Kirchner nationalized YPF in 2012 and Galuccio quickly boosted capital expenditure to as much as $7 billion per year.
The company has a divestment plan of at least $1 billion, which includes the sale of a 70 percent controlling stake in Metrogas SA and the sale of a stake in its electricity unit. The plan seeks to cut the company’s debt which currently stands at $8.5 billion, according to data compiled by Bloomberg.
The committee includes Chief Financial Officer Daniel Gonzalez Casartelli, a former M&A banker who is leading the divestment plan, and Mocorrea, a marketing and communications vice president that Gutierrez brought to YPF.
Darre didn’t immediately respond to a call seeking comment. Alejandro Bianchi, a spokesman for the Energy Ministry, which oversees the majority of the shares held by the state in the company, declined to comment by phone.
"The market is starting to price in some transcendental changes the management will make in the current scenario, with crude prices much more stable than last year, but still at historical lows," Aszpis said.