YPF Nationalized

[MikeMike]

international investment goes where ever there is a buck to be made

Investment money perhaps, but multinationals won't bring many jobs to Argentina. Despite the relatively well educated workforce, instability here is too big of a risk, especially with more stable neighboring countries as alternatives.

 

[camberiu]

PetroBras is a world leader in deep water extraction technology. I'd say that is pretty impressive for a 'state owned' company that you think is shit. PetroBras may have corruption inside, but it hasn't stopped PetroBras from excelling in its market. The price of fuel in Brasil is competely irrelevant to the success of PetroBras.

Oh yeah, great point Karla. We Brazilians should all high-five each other and celebrate Petrobras "deep water extraction" excellence while we pay one of the highest gas prices in the world in order to support the fat salaries and pensions of a bunch of politically appointed cronies that work for that company.

That is a great thing to say to all the poor families in Brasil that have to pay a premium for every day staples because of the ridiculous gas prices charged by the state owned monopoly: "Hey, poor working class person, I know you are paying 30% more for that bottle of milk than you should due to the high gas prices charged by Petrobras, buy hey, they are leaders in deep water extraction. Isn't that awesome? I am sure this news completely changed your life. Nevermind the fact that those state employees that run Petrobras retire with full pensions at age 50 while you will work your ass off until 65 to receive a pension of US$300 a month and continue to suffer higher cost of goods due to the one of the most expensive gas prices in the world."

So, if Cristina can turn YPF into a great deep water explorer while making the Argentinian gasoline one of the most expensive in the world, according to your logic, it will be a great success! A joy to all involved indeed.

 

[willwright]

It's a little tough to figure this out logically. If they want to increase production and eliminate imports this action is likely only to make the situation worse. The government simply doesn't have anything close to the funds necessary to develop the existing resources. Excessive government involvement, price controls, etc. have led to the steadily falling production over the last 10 years. Don't see how more of the same is going to make things better. There's plenty of oil in Argentina, enough for them to become exporters but its going to take billions to develop it. My guess is the net result will be continued falling production and more imports. Maybe there's a secret plan that will answer all our questions in a few weeks, or the people making these decisions are really as dumb as they appear. My guess is that Cristina is surrounded by sycophants that basically tell her what she wants to hear. It would be very interesting to find out how this decision was made, if there was any real discussion of the consequences, or how many people where involved(my guess its a very small circle).

 

[AndrewWoodward]

"The company said earlier that month that the 30,000 square kilometer Vaca Muerta formation in southern Argentina holds at least 23 billion barrels of oil equivalent, according to an external audit that surveyed about 8,000 square kilometers of the area. YPF has about 13 billion barrels in that area, the company said. Developing the entire 23 billion barrels will cost about $25 billion per year for a decade, the company said."

25 billion a year? No problem.

http://www.bloomberg.com/news/2012-...s-51-of-oil-producer-ypf-to-stem-imports.html

 

[mulderfox]

It's a little tough to figure this out logically. If they want to increase production and eliminate imports this action is likely only to make the situation worse. The government simply doesn't have anything close to the funds necessary to develop the existing resources. Excessive government involvement, price controls, etc. have led to the steadily falling production over the last 10 years. Don't see how more of the same is going to make things better. There's plenty of oil in Argentina, enough for them to become exporters but its going to take billions to develop it. My guess is the net result will be continued falling production and more imports. Maybe there's a secret plan that will answer all our questions in a few weeks, or the people making these decisions are really as dumb as they appear. My guess is that Cristina is surrounded by sycophants that basically tell her what she wants to hear. It would be very interesting to find out how this decision was made, if there was any real discussion of the consequences, or how many people where involved(my guess its a very small circle).

the lack of production was a good excuse to rise prices of gas, they produced less cheap gas and more "premium nafta" they did clever things like this and instead of competing with the other companies they all agreed to use such techniques. they were still exporting while argentina had to import fuel to cope with the internal demand. ypf wasn´t a fairy tale and it wont be one now either. big companies are used here to make money fast every way they can, legal or illegal ethical or unethical

 

[mulderfox]

Oh yeah, great point Karla. We Brazilians should all high-five each other and celebrate Petrobras "deep water extraction" excellence while we pay one of the highest gas prices in the world in order to support the fat salaries and pensions of a bunch of politically appointed cronies that work for that company.

That is a great thing to say to all the poor families in Brasil that have to pay a premium for every day staples because of the ridiculous gas prices charged by the state owned monopoly: "Hey, poor working class person, I know you are paying 30% more for that bottle of milk than you should due to the high gas prices charged by Petrobras, buy hey, they are leaders in deep water extraction. Isn't that awesome? I am sure this news completely changed your life. Nevermind the fact that those state employees that run Petrobras retire with full pensions at age 50 while you will work your ass off until 65 to receive a pension of US$300 a month and continue to suffer higher cost of goods due to the one of the most expensive gas prices in the world."

So, if Cristina can turn YPF into a great deep water explorer while making the Argentinian gasoline one of the most expensive in the world, according to your logic, it will be a great success! A joy to all involved indeed.

the price is important but it is not all. in venezuela gas is ridiculously cheap, it`s cheaper than water!. and people use old cars that burn gallons and gallons what will happend when the price gets restored to international prices?. also think of the enviroment

 

[gusgutier]

Quite frankly, the most astute comment on this thread came from a poster musing about connection between Malvinas and YPF. It is very likely that Repsol was not interested in exploration near the Malvinas as per pressure from the UK, and in particular UK banks which own a sizable chunk of Spain's gvmt and private debts.

Argentina is already exploring South Atlantic :ww.iprofesional.com/notas/72796-YPF-y-Enarsa-se-sumergen-en-el-mar-argentino-a-la-busqueda-de-mas-petroleo.html

 

[gusgutier]

PetroBras is a world leader in deep water extraction technology. I'd say that is pretty impressive for a 'state owned' company that you think is shit. PetroBras may have corruption inside, but it hasn't stopped PetroBras from excelling in its market. The price of fuel in Brasil is competely irrelevant to the success of PetroBras.

In case you haven't realized it yet, all institutions are full of corruption; that is the natural outcome of getting a bunch of selfish individuals together. What matters is if the corruption gets so out of hand that it stops the institution from performing.

Listen to Karla, she is a smart girl.

 

[bebero]

For those of you who read Spanish
http://www.carlosheller.com.ar/2012/04/16/el-necesario-control-estatal-sobre-ypf/#more-5232

 

[nicoenarg]

There is a difference between the success of a sovereign owned oil company versus the 'success' of the country for which it bears the flag. Aramco is the most valuable firm in the entire world and it has developed into a very large multinational player with technological leadership in many parts of oil production. The wealth distribution policies of the Saud family are irrelevant to measurement of the success of the nationalization of Aramco. Or were you thinking that a 'success story ' of nationalization is where the company's revenues are distributed to the hoi polloi while the company neglects to invest in R&D. Perhaps that is what you are hoping for YPF.

Most of what I wanted to say has already been said in multiple posts by trennod.

I just wanted to pick this one up and talk about it a little.

The reason I said Saudi Arabia was not a good example has NOTHING whatsoever to do with whether Saudi Aramco is itself a successful company or not (and there is no doubt that it is, Americans did a stand up job setting up a world class company in Saudi Arabia ). And again, it does not matter whether YPF will be successful or not. I do not know, neither do you, what will happen to YPF in the near future. And I don't think anyone here, except you Karla, is talking about the future of YPF to begin with.

The reason Saudi Arabia has not done so swell in the last 20 or so years is directly related to their nationalizing of Aramco (turning it into Saudi Aramco) and of other foreign companies during their nationalization binge that started slowly mid-1980s and reached extreme heights around 1995 (when exit visas for foreigners in management positions were issued en masse).

There was still plenty of money to be made in Saudi Arabia but, lo and behold, foreign investment was redirected. It is little wonder that around the same time the UAE started to spring up as an up and coming nation. They had freer markets, and they had laws regulating guaranteed ownership of companies (in majority of cases, ownership in the UAE is always 51% owned by a UAE national, sleeping partner and 49% owned by you. You pay the sleeping partner a fixed monthly "salary", not a cut of the profits. Its not ideal in any sense but it is way better than Saudi Arabia where your business would be gobbled up by the government with little to no warning).

You're right, investment goes wherever there is a buck to be made. But I would tweak that a little and add, "investment goes wherever there is a buck to be made in a relatively secure environment". No body wants to invest in a place where their hard work and capital will be gobbled up at the whim of an erratic, child-like leader.

Back to my point about Saudi Arabia again. Saudi Arabia has been a s**thole now for over a decade and a half and that is mostly thanks to the "buck" being made with lesser returns but more guarantees in the neighboring UAE, Bahrain, Qatar, Kuwait and even Oman. (Just a side note: UAE had its own fiasco where they tried to hide their problems and faced a market crash in 2008. Investment froze, companies picked up and left, property prices, the blood of the UAE economy, collapsed by at least 60% depending on where you had your property. The guy who owned Ireland on The World committed suicide, etc etc).

As for "some" countries not needing foreign investment, I am sure there are some countries like that but I think one would need to be either high or rayally ignorant of the economic situation here if they thought that Argentina is one such country. Even the super moronic CFK is worried about trade deficit.

Oh and to wrap it up, I have heard the "government was dealt a sh**ty hand" argument before. It has been 10 years already. I would assume if they really were trying to make things better, the economy would be on the up and up and not trying to go back to the sh*thole they just crawled out of in 2002.