by Sebastián Premici
“I never understood why they privatized it. What they did with the oil fields was terrible, we could see that, but we did not know the whole of it. The business had very good economic results, you could see it on the books, but none of it stayed here.” Omar Stocco is a chemical engineer and plant manager of the YPF refinery in Luján de Cuyo, Mendoza. He has worked for the company for 25 years and was a witness to the whole process of privatization. Now, at 52, he will be in charge of security at the refinery, which currently produces 13,000 cubic meters of fuel. But he will also be a witness to the new managerial and political change in the petroleum company. “Everything is in place for things to be done well,” he declared.
We toured part of the refinery and the wells at the Vizcacheras oil field, in the Barrancas area. According to government data, refining capacity could increase by 20 percent in a short time, as could the production of crude oil, predictions that are in line with the Strategic Plan presented this week by the company CEO, Miguel Galuccio, and President Cristina Fernández de Kirchner. “YPF should again be the country’s emblematic enterprise, should be what it was at one time,” Omar says forcefully. His father, Silvio, was also part of the YPF family. He came in in 1958 and left 34 years later, during the voluntary retirements of the privatization period. “The truth is, I thought recuperation would happen earlier, in 2005 or 2006,” he relates.
The Luján de Cuyo refinery occupies a seven-hectare site. Its entire production is distributed among 14 provinces. Its total refining capacity reaches 16,000 cubic meters, that is, between 20 and 25 percent of the total fuel refined in the country. During management by Repsol, the company disclosed only that the refinery operated at 75 percent of its capacity. But once provincial intervention managed to access the exact numbers, it found that they were close to 98 percent of refining capacity. That is, the former management put aside part of the refined fuel.
“This was the company’s scheme of speculation. They sought the best place to sell that fuel, without thinking of the energy needs of the small localities. We should turn that logic around, with balanced production,” declared the governor, Francisco “Paco” Pérez. The business focused its production on premium gasoline. Instead of producing one liter of that fuel, they could produce 1.2 liters of “plus” grade gasoline. This is how the production will be balanced, leaving aside the more expensive grades of gasoline, at least until the supplies throughout the country are normalized.
A refinery is a large city. Each production unit is a world apart, with its characteristic noises and smells. The unit where liquified petroleum gas (LPG) is produced, the unit were sulfur is produced, with its characteristic odor, something like rotten eggs, the unit where carbon molecules are separated so the materials extracted from underground will be lighter, the unit that produce gasoline, hydrogen, which is also sold, and diesel, among other things.
“The noise and the smells are part of our life. They mean being in production, which is the day-to-day struggle. The machinery has its own life. I am enthusiastic about everything industrial. Industry is central to the growth of a country.” Omar Stocco knows what he is talking about. And what he is saying is not far from Galuccio’s vision. For a petroleum company to grow, its workers have to be on the ground or close to the machinery. “We cannot have 2,000 employees concentrated in Puerto Madero and 500 at the wells. We have to reverse the equation,” was one of Galuccio’s first directives when he visited Mendoza, before he was formally named CEO of the company. The refinery currently employs 570 people and there are another 500 at the oil fields. There are 2000 related workers.
More crude oil
In Mendoza there are 150 million cubic meters of conventional crude oil reserves, of which YPF accounts for 90 million. The total of active wells in the province, for the purposes of conventional resources, has reached 3,000. But there are another 900 that are in the “inactive” category either because they have a greater proportion of water than crude oil or because they are under study, abandoned or in the process of being abandoned. Nevertheless, by using technology for reactivating wells they could be exploited. “If the wells that are now cut off are reactivated, production could be increased by 20 percent,” Governor Paco Pérez told this paper.
Ricardo Ponti is head of the team of the Nabors contracting company. He is in charge of a field where a single repair team is working. “There could easily be two or three wells per location. In Colombia or Venezuela, there are five wells per field. Here the work was being done drop by drop, little money was being spent and as much as possible was being taken out,” said Ponti, who has been involved in the industry for 20 years. The new management would send in seven new recuperation teams for this area.
According to what Galuccio said this week, during the next 50 years the company will apply an intensive exploitation plan in the Vaca Muerta area, covering 50 square kilometers of simultaneous excavation. In Mendoza, this area represents reserves of 160 million cubic meters, of which 80 percent belongs to YPF, according to government data.
“Do you prefer a YPF under state control or a private company?” we asked Rubén Colado, one of the supervisors at the field visited by this paper. “State, all the way,” was his immediate answer. “There is more stability, it is something else. Our source of work will be guaranteed and the business will improve,” he continued. “With Repsol it was all held back, they didn’t invest, it was very quiet. We will for sure see an improvement in our work and in society.”
Stocco has five children. One studies international relations, another human resources, another is in high school and there is a little ten-year-old. The oldest of his daughters studies renewable resources engineering. “YPF has to create a future. This recuperation was, as would be said, a blow for justice,” Omar concludes.
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