Daily Archives: April 22, 2012
(Reuters) – Government economist Axel Kicillof stormed the world stage this week when Argentina moved to nationalize energy company YPF, defending the plan he helped devise in a fiery speech worthy of Venezuelan President Hugo Chavez.
Charismatic and polarizing, the 40-year-old Kicillof lambasted “free-market fundamentalists” as he defended the push to seize control of YPF from Spain’s Repsol.
Just four months after taking the deputy economy minister post, Kicillof has penetrated the small circle of trusted advisers to President Cristina Fernandez, who singles him out for praise in her speeches.
Sporting sideburns and an open collar, Kicillof told Congress that only “morons” would think the state was stupid enough to play by Repsol’s rules and make an offer to buy 100 percent of its shares. He blasted economic theories that “justify the looting of our resources and our companies.”
People who know Kicillof say they are not surprised to see him become the public face of a move that has prompted howls of protest from abroad. They say he has always been brilliant, hard-working and even messianic.
One classmate remembered a high school camping trip where Kicillof and a group of friends played at him being God, surrounded by his chanting followers.
“It was child’s play, but it’s striking that Axel was God,” she said, speaking on condition of anonymity.
Kicillof, who declined to be interviewed for this story, spent most of his career in academia, giving classes and writing about the theories of economists such as John Maynard Keynes and Karl Marx.
His first foray into business administration came in 2009, when he took a key position at flagship carrier Aerolineas Argentinas, which the government had expropriated from Spanish travel group Marsans.
Last year, he rose to prominence when Fernandez’s administration fought to appoint him as state representative on the board of directors at steelmaker Siderar, despite company resistance.
With that, local media at odds with the government crowned him the new radical boogeyman.
As a college student, Kicillof co-founded TNT, a group that used irony and humor to tackle corruption and raise standards inside state-run Buenos Aires University’s economics department.
Later, during the 1999 presidential election, he helped organize a protest against Argentina’s obligatory vote because he said the field of candidates was too narrow.
“He’s a brilliant guy. He’s one of the most intelligent people I know, very honest and with strong ideals,” said Leo Piccioli, general manager of Staples Argentina and a fellow member of TNT in the 1990s.
Despite his youthful appearance, Kicillof is an old-school ideologue who shuns the tenets of 21st Century globalism and believes Argentina must find its own way to economic development and industrial prominence.
In his Tuesday speech, he mocked the concept of the “rule of law,” saying this was designed to protect big business. He also compared the Spanish operators of YPF and Aerolineas Argentinas, who received no compensation after the airline was expropriated.
“Spanish officials decide what is done at YPF … in the same way that (Marsans) was bent on lobotomizing Aerolineas Argentinas,” Kicillof said. “This is a transnational group that doesn’t think about the Argentine worker.”
Kicillof helped put together a strategic plan for Aerolineas, which critics say has failed because the company keeps losing money. Others say it is impossible to evaluate his administration of the airline’s finances when so much tax revenue has been used to revamp the company.
Admirers call him captivating while critics see him as inflexible and verbose. His influence is growing where it counts — with the president.
At both Siderar and YPF, Kicillof urged company officials to make fewer dividend payments abroad and invest more locally. Fernandez ended up enshrining that view in government policy.
“He was the main architect of this concept,” said a personal acquaintance who met Kicillof in the last few years. “He is absolutely convinced that (his vision) will be Argentina’s salvation and not its death knell.”
Some people view Kicillof as a threat to the country’s future, saying he will scare off private investors. Emerging markets analyst Walter Molano at U.S.-based BCP Securities called Kicillof “a flaming red Marxist” on Thursday.
One old friend said his lack of political experience, and his impulsive, irreverent style, could eventually cause a rift with the president and end with him being scapegoated.
But that view might underestimate the loyalty shown by Fernandez to another controversial government figure, price and import czar Guillermo Moreno, famed for his vulgar talk and his fanatical work ethic.
Like Moreno, Kicillof isn’t seen giving an inch.
“He is intelligent,” his old schoolmate said. “But he won’t listen to other opinions or other points of view. He won’t learn from past mistakes.”
- Leftist economist the fire under Argentina’s Repsol asset grab (business.financialpost.com)
- The Man Behind Argentina’s Next Crash (blogs.the-american-interest.com)
- Incensed Spain threatens Argentina after YPF seizure (mb50.wordpress.com)
Vantage Drilling Company announced Friday that the Luxembourg branch of its wholly-owned subsidiary Vantage Drilling Poland Sp. z o.o. acquired and took delivery of the Titanium Explorer, a deepwater drillship formerly known as the Dragonquest.
The acquisition was accomplished under the previously announced Purchase Agreement (“Purchase Agreement”) with Valencia Drilling Corporation (“Valencia”), an affiliate of F3 Capital, Vantage’s largest shareholder, pursuant to which all of Valencia’s rights and obligations under the shipbuilding contract for the Titanium Explorer, together with related rig equipment, was purchased for an aggregate purchase price of $169.0 million. The purchase price under the Purchase Agreement and all remaining construction and startup costs for the Titanium Explorer in the amount of approximately $630.0 million were financed with the proceeds from the recent $775.0 million notes offering of Offshore Group Investment Limited, another wholly-owned subsidiary of Vantage. The notes were priced at 108% of par, resulting in total proceeds to the Company in excess of $820.0 million, net of offering fees and expenses.
The Titanium Explorer is a self-propelled, dynamically positioned drillship suited for drilling in remote locations because of its mobility and large load carrying capacity. It is currently equipped for drilling in water depths up to 10,000 feet, and is designed to drill in water depths up to 12,000 feet. Another Vantage subsidiary is party to an eight-year contract with Petrobras to operate the Titanium Explorer.
“We are extremely pleased to announce the completion of the acquisition of the Titanium Explorer. The newest addition to our fleet represents the culmination of nearly four years of effort as we have been involved in the Titanium Explorer project since its inception. We appreciate the support of F3 Capital in concluding these efforts and look forward to a successful commencement of operations in the US Gulf of Mexico with our customer,” said Paul Bragg, Chief Executive Officer of Vantage.
- USA: Vantage Drilling Buys Dragonquest Drillship (mb50.wordpress.com)
- USA: Vantage Drilling Reports Record Revenues (mb50.wordpress.com)
- Apache Hires Drillship for Ops Offshore Kenya (mb50.wordpress.com)
- Ensco in $645m drillship buy (mb50.wordpress.com)
- South Korea: Pacific Drilling Extends Option for its 7th Drillship (mb50.wordpress.com)