Argentina’s Supreme Court has ruled that state oil company YPF must make public the secret clauses of its July 2013 agreement with US company Chevron.
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In July 2013, Ali Moshiri Chevron CEO for South America (left) and YPF CEO Miguel Galuccio signed a deal to exploit Vaca Muerta oilfield. (Photo : Press YPF/Télam/aa)
Argentina’s highest court found that the agreement, which concerns operations in the massive Vaca Muerta oil field in Neuquén province, is of “public interest” and that therefore “it is unacceptable, within the principles of a democratic society, that [YPF] refuses to offer information that would make its management public and transparent.”
The court found that since the state has owned 51% of YPF since 2012 when it seized Repsol’s controlling stake, and given that the government has a demonstrably strong influence over the company, it must operate according to the laws allowing anyone to request information from a state-run institution.
This overturns a 2014 ruling from the Federal Administration’s Litigations Chamber, which found that the deal was effectively between two private companies and therefore not subject to freedom of information.
YPF said that it will adhere to the court’s ruling “according to the current regulations and within the established periods.” However it also reiterated the arguments used in its previous defence, saying that according to the law under which shares were expropriated in 2012, “the company operates as a publicly held company” and is not covered by the decrees which govern access to information of state-run enterprises. The statement also highlighted that the deal had brought 5,000 jobs and US$2.5bn to the country.
Cabinet chief Aníbal Fernández said this morning that the Supreme Court’s ruling is an “attack on [Argentina’s] judicial security, because it will prevent companies who want to invest in Argentina from doing it on terms they’ve agreed.” He characterised the decision as “politically motivated”.
Yesterday’s verdict is the culmination of a prolonged legal process started by socialist Senator Héctor Rubén Giustiniani in 2013 after YPF rejected his request for information on the activities to be carried out, particularly on their environmental implications.
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YPF station in Vaca Muerta, Neuquén (photo: Pepe Delloro/Télam/aa)
Opposition leaders and environmental groups have condemned the deal, saying that its undisclosed clauses likely contain concessions to Chevron which undermine national interests.
Giustiniani praised the Supreme Court’s decision, saying that there should not be “secret clauses in the contract” which may “oblige the country to hand over an area which is the third richest in the world in unconventional petrol and gas for 35 years.”
Article 10 of decree 1172/2003, which regulates access to public information for business controlled by the executive, sets a term of 30 days for the provision of information in cases such as these.
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