Argentine state-controlled energy company YPF SA should go back to its core business of pumping oil and stop investing in other projects like scooters, according to Sergio Massa.
“I have criticisms of the current administration,” Sergio Massa, a lower house Chamber of Deputies candidate for Buenos Aires Province, said at an event at the Woodrow Wilson Center in Washington on Friday. “They decided to invest in scooter makers rather than in drilling for oil – when YPF is an oil company!”
Alberto Fernández, who won Argentina’s primary last month and is leading polls ahead of the October 27 national vote, will be the one choosing members of the YPF board if elected, Massa said, adding that he hasn’t discussed candidates or profiles with the Frente de Todos presidential frontrunner, nor made recommendations.
After trading little changed earlier Friday, YPF US depositary receipts rose as much as 2.9 percent to US$9.65 in New York following Massa’s comments.
A YPF spokesman declined to comment.
Massa’s speech is the first sign from the Fernández team that if elected, the former cabinet chief will shift YPF’s strategy to one aimed at increasing output. Led by financial wizards appointed by President Mauricio Macri, YPF saw production drop for a second straight year in 2018.
Under Chairman Miguel Ángel Gutiérrez, a founding partner at the Rohatyn Group, and Chief Executive Officer Daniel González Casartelli, a former Latin America director at Bank of America Corp, the company focused on shoring up its balance sheet. It sold assets, cutting capital expenditures from as much as US$6 billion a year during the administration of president Cristina Fernández de Kirchner, who is running as Fernández’s vice-presidential candidate, to as low as US$3.7 billion during Macri’s years.
While oil and gas production remained flat, the current administration tried to boost other business such as investing in Bird Technologies, a leading company in urban micro-mobility that provides short distance personal mobility services by distributing electric scooters in big cities.
YPF executives said in June that no investment in any single project would exceed 0.1 percent of the company’s capital expenditure, which the company forecasts at as much as US$4 billion this year.