BUENOS AIRES (Reuters) - Argentine President Cristina Fernandez named a former executive at global oilfield services giant Schlumberger Ltd to run newly expropriated energy company YPF - signaling her commitment to a professional management team.
The executive, Miguel Galuccio, is an engineer who led the integrated project management unit of Schlumberger (SLB.N). Fernandez made the announcement on Friday after signing into law a bill to seize control of YPF from Spain’s Repsol (REP.MC).
“The idea is to have a YPF that is absolutely modern, competitive, with professional people but with a political orientation aimed at achieving energy self-sufficiency once again to sustain growth, employment and economic activity,” Fernandez said in a live televised speech.
YPF (YPFD.BA) was renationalized as part of Fernandez’s bid to tighten state control over the economy. It had been privatized in the 1990s after 70 years of full state control, and her government accused Repsol of allowing production to fall as it squeezed profits from YPF - a charge Repsol denies.
Argentina’s lower house of Congress overwhelmingly passed on Thursday the bill to expropriate Repsol’s 51 percent stake in YPF, reflecting broad popular support for the measure despite protests from Spain and the European Union.
Many Argentines are wary of foreign companies and blame the free-market policies of the 1990s for causing the country’s 2001-2002 sovereign debt default and shock currency devaluation.
But foreign analysts warn that this could scare off the investment needed to build domestic industry, stoke growth and cool off Argentina’s double-digit inflation.
The appointment of Galuccio could soothe some market concerns, however. The 44-year-old Argentine worked for YPF before Repsol took control in the late 1990s and he has more than 20 years of experience in the field.
At Schlumberger, he initially worked in Mexico and Central America, increasing ties between his company and Mexican state oil company Pemex, according to a press statement.
YPF’s shares in Buenos Aires surged 10 percent on Friday in anticipation that the government would put an industry professional at the helm of the country’s biggest energy company, traders said.
Galuccio “has management experience in different countries and he has experience dealing with state companies like Pemex and (Saudi Arabia‘s) Aramco,” said Daniel Redondo, a former Exxon Mobil executive familiar with Galuccio’s trajectory.
Reporting by Guido Nejamkis and Hilary Burke; Additional reporting by Jorge Otaola; Editing by Tim Dobbyn, Gary Hill