Title
of Each Class
|
Name
of Each Exchange
on
Which Registered
|
|
American
Depositary Shares, each representing one Class D Share, par value 10 pesos
per share
|
New
York Stock Exchange
|
|
Class
D Shares
|
New
York Stock Exchange*
|
*
|
Listed
not for trading but only in connection with the registration of American
Depositary Shares.
|
Class
A Shares
|
3,764
|
Class
B Shares
|
7,624
|
Class
C Shares
|
105,736
|
Class
D Shares
|
393,195,669
|
393,312,793
|
Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.
|
Yes
No S
|
|
|
||
If
this report is an annual or transition report, indicate by check mark if
the registrant is not required to file reports pursuant to Section 13 OR
15(d) of the Securities Exchange Act of 1934.
|
Yes
No S
|
|
Note
– Checking the box above will not relieve any registrant required to file
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 from their obligations under those Sections.
|
||
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
|
Yes S
No
|
|
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the
Exchange Act. (Check one):
|
||
Large
accelerated filer o Accelerated
filer x Non-accelerated
filer o
|
||
Indicate
by check mark which financial statement item the registrant has elected to
follow.
|
Item
17 Item 18 S
|
|
If
this is an annual report, indicate by check mark whether the registrant is
a shell company (as defined in Rule 12b-2 of the Exchange
Act)
|
Yes
No S
|
Conversion
Table
|
1
|
References
|
1
|
Disclosure of Certain
Information
|
1
|
Forward-Looking
Statements
|
1
|
Oil and Gas
Terms
|
3
|
PART I
|
9
|
ITEM 1. Identity of
Directors, Senior Managers and Advisers
|
9
|
ITEM 2. Offer
Statistics and Expected Timetable
|
9
|
ITEM 3. Key
Information
|
9
|
Selected Financial
Data
|
9
|
Risk
Factors
|
13
|
ITEM 4. Information
on the Company
|
23
|
History and Development of
YPF
|
23
|
The Argentine
Market
|
26
|
History of
YPF
|
26
|
Business
Segments
|
26
|
Exploration and
Production
|
28
|
Exploration and Development
Activities
|
31
|
Refining and
Marketing
|
47
|
Chemicals
|
53
|
Research and
Development
|
54
|
Competition
|
55
|
Environmental
Matters
|
55
|
Property, Plant and
Equipment
|
57
|
Regulatory Framework
and Relationship with the
Argentine
Government
|
58
|
ITEM 4A. Unresolved Staff
Comments
|
74
|
ITEM 5. Operating and
Financial Review and Prospects
|
75
|
Overview
|
75
|
Presentation of Financial
Information
|
76
|
Segment
Reporting
|
76
|
Factors Affecting Our
Operations
|
77
|
Critical Accounting
Policies
|
85
|
Principal Income Statement
Line Items
|
90
|
Results of
Operations
|
92
|
Liquidity and Capital
Resources
|
98
|
Off-Balance Sheet
Arrangements
|
103
|
ITEM 6. Directors, Senior
Management and Employees
|
104
|
Board of
Directors
|
104
|
The Audit
Committee
|
110
|
Independence of the Members of our Board of
Directors and Audit Committee
|
112
|
Disclosure
Committee
|
112
|
Executive
Officers
|
114
|
Compliance with NYSE Listing
Standards on Corporate Governance
|
114
|
Compensation of Directors and
Officers
|
115
|
Supervisory
Committee
|
115
|
Employee
Matters
|
118
|
ITEM 7. Major Shareholders
and Related Party Transactions
|
120
|
Share Purchase Agreement and
Related Financing Agreements
|
120
|
Option
Agreements
|
121
|
Shareholders’
Agreement
|
121
|
Registration Rights and Related
Agreements
|
123
|
Related Party
Transactions
|
124
|
Argentine Law Concerning Related
Party Transactions
|
124
|
ITEM 8. Financial
Information
|
126
|
Financial
Statements
|
126
|
Legal
Proceedings
|
126
|
Dividends
Policy
|
139
|
ITEM 9. The Offer and
Listing
|
140
|
Shares and
ADSs
|
140
|
Argentine Securities
Market
|
142
|
ITEM 10. Additional
Information
|
145
|
Memorandum and Articles of
Association
|
145
|
Directors
|
145
|
Foreign Investment
Legislation
|
146
|
Dividends
|
147
|
Amount Available for
Distribution
|
147
|
Preemptive and Accretion
Rights
|
148
|
Voting of the Underlying Class D
Shares
|
149
|
Certain Provisions Relating to
Acquisitions of Shares
|
150
|
Taxation
|
152
|
Argentine Tax
Considerations
|
152
|
United States Federal Income Tax
Considerations
|
154
|
Available
Information
|
156
|
ITEM 11. Quantitative and
Qualitative Disclosures about Market Risk
|
157
|
ITEM 12. Description of Securities
Other than Equity Securities
|
158
|
PART II
|
159
|
ITEM 13. Defaults, Dividend
Arrearages and Delinquencies
|
159
|
ITEM 14. Material Modifications to
the Rights of
Security Holders and Use of Proceeds
|
159
|
ITEM 15. Controls and
Procedures
|
159
|
ITEM 16.
|
160
|
ITEM 16A. Audit Committee Financial
Expert
|
160
|
ITEM 16B. Code of
Ethics
|
160
|
ITEM 16C. Principal Accountant Fees and
Services
|
160
|
ITEM 16D. Exemptions from the Listing
Standards for Audit Committees
|
161
|
ITEM 16E. Purchases of Equity Securities by the
Issuer and Affiliated Purchasers
|
161
|
PART III
|
162
|
ITEM 17. Financial
Statements
|
162
|
ITEM 18. Financial
Statements
|
162
|
ITEM 19.
Exhibits
|
162
|
SIGNATURES
|
163
|
·
|
for
the subsidiaries that were consolidated using the global integration
method at the date or for the periods indicated, 100% of the assets,
liabilities and results of operations of such subsidiaries without
excluding minority interests, and
|
·
|
for
those subsidiaries whose results were consolidated using the proportional
integration method, a pro rata amount of the assets, liabilities and
results of operations for such subsidiaries at the date or for the periods
indicated. For information regarding consolidation, see Note 1 to the
Audited Consolidated Financial
Statements.
|
(i)
|
Such
activities include:
|
A.
|
The
search for crude oil, including condensate and natural gas liquids, or
natural gas (“oil and gas”) in their natural states and original
locations.
|
B.
|
The
acquisition of property rights or properties for the purpose of further
exploration and/or for the purpose of removing the oil or gas from
existing reservoirs on those
properties.
|
C.
|
The
construction, drilling and production activities necessary to retrieve oil
and gas from their natural reservoirs, and the acquisition, construction,
installation, and maintenance of field gathering and storage systems –
including lifting the oil and gas to the surface and gathering, treating,
field processing (as in the case of processing gas to extract liquid
hydrocarbons) and field storage. For purposes of this section, the oil and
gas production function shall normally be regarded as terminating at the
outlet valve on the lease or field storage tank; if unusual physical or
operational circumstances exist, it may be appropriate to regard the
production function as terminating at the first point at which oil, gas or
gas liquids are delivered to a main pipeline, a common carrier, a
refinery, or a marine terminal.
|
(ii)
|
Oil
and gas producing activities do not
include:
|
A.
|
The
transporting, refining and marketing of oil and
gas;
|
B.
|
Activities
relating to the production of natural resources other than oil and
gas;
|
C.
|
The
production of geothermal steam or the extraction of hydrocarbons as a
by-product of the production of geothermal steam or associated geothermal
resources as defined in the Geothermal Steam Act of 1970;
or
|
D.
|
The
extraction of hydrocarbons from shale, tar sands or
coal.
|
i)
|
Reservoirs
are considered proved if economic productibility is supported by either
actual production or conclusive formation test. The area of a reservoir
considered proved includes:
|
A.
|
that
portion delineated by drilling and defined by gas-oil and/or oil-water
contacts, if any; and
|
B.
|
the
immediately adjoining portions not yet drilled, but which can be
reasonably judged as economically productive on the basis of available
geological and engineering data. In the absence of information on fluid
contacts, the lowest known structural occurrence of hydrocarbons controls
the lower proved limit of the
reservoir.
|
ii)
|
Reserves
that can be produced economically through application of improved recovery
techniques (such as fluid injection) are included in the “proved”
classification when successful testing by a pilot project, or the
operation of an installed program in the reservoir, provides support for
the engineering analysis on which the project or program was
based.
|
A.
|
oil
that may become available from known reservoirs but is classified
separately as “indicated additional
reserves”;
|
B.
|
crude
oil, natural gas, and natural gas liquids, the recovery of which is
subject to reasonable doubt because of uncertainty as to geology,
reservoir characteristics, or economic
factors;
|
C.
|
crude
oil, natural gas, and natural gas liquids, that may occur in undrilled
prospects; and
|
D.
|
crude
oil, natural gas, and natural gas liquids, that may be recovered from oil
sales, coal, gilsonite and other such
sources.
|
|
inquiry;
|
|
analytical
procedures;
|
|
analysis;
|
|
review
of historical reserves performance;
and
|
|
discussions
with reserves management staff.
|
|
“bbl”
|
Barrels
|
|
“Bcf”
|
Billion
cubic feet ≡ 109 cubic feet
|
|
“Bcm”
|
Billion
cubic meters ≡ 109 cubic meters
|
|
“boe”
|
Barrels
of oil equivalent
|
|
“boe/d”
|
Barrels
of oil equivalent per day
|
|
“Condensate”
|
Mixture
of hydrocarbons that exist in the gaseous phase at original temperature
and pressure of the reservoir, but when produced condense into liquid
phase at temperature and pressure associated with surface production
equipment
|
|
“Gas”
|
Natural
gas
|
|
“GWh”
|
Gigawatt
hours
|
|
“HP”
|
Horse
Power
|
|
“km”
|
Kilometers
|
|
“km2”
|
Square
kilometers
|
|
“m”
|
Thousand
|
|
“m3”
|
Cubic
meter
|
|
“mbbl/d”
|
Thousand
barrels per day
|
|
“mboe/d”
|
Thousand
barrels of oil equivalent per day
|
|
“mcf”
|
Thousand
cubic feet
|
|
“mcm”
|
Thousand
cubic meters
|
|
“mm”
|
Million
|
|
“mmbbl”
|
Million
barrels
|
|
“mmboe”
|
Million
barrels of oil equivalent
|
|
“mmboe/d”
|
Million
barrels of oil equivalent per day
|
|
“mmBtu”
|
Million
British thermal units
|
|
“mmcf”
|
Million
cubic feet
|
|
“mmcf/d”
|
Million
cubic feet per day
|
|
“mmcm”
|
Million
cubic meters
|
|
“mmcm/d”
|
Million
cubic meters per day
|
|
“mtn”
|
Thousand
tons
|
|
“MW”
|
Megawatts
|
|
“Oil”
|
Crude
oil, condensate and natural gas
liquids
|
|
“WTI”
|
West
Texas Intermediate
|
|
“USA”
|
United
States
|
As
of and for Year Ended December 31,
|
||||||||||||||||||||||||
2007
|
2007
|
2006
|
2005(1)
|
2004(1)
|
2003(2)
|
|||||||||||||||||||
(in
millions of
|
||||||||||||||||||||||||
U.S.$,
except for per share and per ADS data)
|
(in
millions of pesos,
except
for per share
and
per ADS data)
|
|||||||||||||||||||||||
Consolidated
Income Statement Data:
|
||||||||||||||||||||||||
Argentine
GAAP(3)
|
||||||||||||||||||||||||
Net
sales(4)(5)
|
9,239 | 29,104 | 25,635 | 22,901 | 19,931 | 17,514 | ||||||||||||||||||
Gross
profit
|
3,208 | 10,104 | 9,814 | 11,643 | 10,719 | 9,758 | ||||||||||||||||||
Administrative
expenses
|
(256 | ) | (805 | ) | (674 | ) | (552 | ) | (463 | ) | (378 | ) | ||||||||||||
Selling
expenses
|
(673 | ) | (2,120 | ) | (1,797 | ) | (1,652 | ) | (1,403 | ) | (1,148 | ) | ||||||||||||
Exploration
expenses
|
(166 | ) | (522 | ) | (460 | ) | (280 | ) | (382 | ) | (277 | ) | ||||||||||||
Operating
income
|
2,113 | 6,657 | 6,883 | 9,161 | 8,471 | 7,955 | ||||||||||||||||||
Income
on long-term investments
|
11 | 34 | 183 | 39 | 154 | 150 | ||||||||||||||||||
Other
expenses, net
|
(139 | ) | (439 | ) | (204 | ) | (545 | ) | (981 | ) | (152 | ) | ||||||||||||
Interest
expense
|
(93 | ) | (292 | ) | (213 | ) | (459 | ) | (221 | ) | (252 | ) | ||||||||||||
Other
financial income (expenses) and holding gains (losses),
net
|
257 | 810 | 667 | 561 | 359 | 202 | ||||||||||||||||||
Income
from sale of long-term investments
|
2 | 5 | 11 | 15 | — | — | ||||||||||||||||||
Reversal
(impairment) of other current assets
|
22 | 69 | (69 | ) | — | — | — | |||||||||||||||||
Income
before income tax
|
2,173 | 6,844 | 7,258 | 8,772 | 7,782 | 7,903 | ||||||||||||||||||
Income
tax
|
(876 | ) | (2,758 | ) | (2,801 | ) | (3,410 | ) | (3,017 | ) | (3,290 | ) | ||||||||||||
Net
income from continuing operations
|
1,297 | 4,086 | 4,457 | 5,362 | 4,765 | 4,613 | ||||||||||||||||||
Income
on discontinued operations
|
— | — | — | 3 | 15 | |||||||||||||||||||
Income
from sale of discontinued operations
|
— | — | — | 139 | — | |||||||||||||||||||
Net
income
|
1,297 | 4,086 | 4,457 | 5,362 | 4,907 | 4,628 | ||||||||||||||||||
Earnings
per share and per ADS(6)
|
3.30 | 10.39 | 11.33 | 13.63 | 12.48 | 11.77 | ||||||||||||||||||
Dividends
per share and per ADS(6) (in pesos)
|
n.a.
|
6.00 | 6.00 | 12.40 | 13.50 | 7.60 | ||||||||||||||||||
Dividends
per share and per ADS(6)(7) (in U.S. dollars)
|
n.a.
|
1.93 | 1.97 | 4.25 | 4.70 | 2.62 | ||||||||||||||||||
U.S.
GAAP
|
||||||||||||||||||||||||
Operating
income
|
1,643 | 5,176 | 5,626 | 8,065 | 6,550 | 7,567 | ||||||||||||||||||
Net
income
|
1,056 | 3,325 | 3,667 | 5,142 | 4,186 | 4,435 | ||||||||||||||||||
Earnings
per share and per ADS(6) (in pesos)
|
n.a.
|
8.45 | 9.32 | 13.07 | 10.64 | 11.28 | ||||||||||||||||||
Consolidated
Balance Sheet Data:
|
||||||||||||||||||||||||
Argentine
GAAP(3)
|
||||||||||||||||||||||||
Cash
|
62 | 196 | 118 | 122 | 492 | 355 | ||||||||||||||||||
Working
capital
|
1,296 | 4,081 | 4,905 | 2,903 | 3,549 | 4,001 | ||||||||||||||||||
Total
assets
|
12,096 | 38,102 | 35,394 | 32,224 | 30,922 | 32,944 | ||||||||||||||||||
Total
debt(8)
|
316 | 994 | 1,425 | 1,453 | 1,930 | 2,998 | ||||||||||||||||||
Shareholders’
equity(9)
|
8,273 | 26,060 | 24,345 | 22,249 | 21,769 | 22,534 | ||||||||||||||||||
U.S.
GAAP
|
||||||||||||||||||||||||
Total
assets
|
12,935 | 40,746 | 37,046 | 34,748 | 32,540 | 34,125 | ||||||||||||||||||
Shareholders’
equity
|
9,228 | 29,067 | 26,241 | 24,254 | 23,506 | 24,334 | ||||||||||||||||||
Other
Consolidated Financial Data:
|
||||||||||||||||||||||||
Argentine
GAAP
|
||||||||||||||||||||||||
Fixed
assets depreciation
|
1,314 | 4,139 | 3,718 | 2,707 | 2,470 | 2,307 | ||||||||||||||||||
Cash
used in fixed asset acquisitions
|
1,957 | 6,163 | 5,002 | 3,722 | 2,867 | 2,418 |
(1)
|
Consolidated
income and balance sheet data for the years ended December 31, 2005 and
2004 set forth above include the retroactive effect from the application
of new accounting rules in Argentina effective since January 1,
2006.
|
(2)
|
Consolidated
income and balance sheet data for the year ended December 31, 2003 set
forth above do not include the retroactive effect from the application of
new accounting rules in Argentina, which was not
material.
|
(3)
|
The
financial statements reflect the effect of changes in the purchasing power
of money by the application of the method for remeasurement in constant
Argentine pesos set forth in Technical Resolution No. 6 of the Argentine
Federation of Professional Councils in Economic Sciences (“F.A.C.P.C.E.”)
and taking into consideration General Resolution No. 441 of the National
Securities Commission (“CNV”), which established the discontinuation of
the remeasurement of financial statements in constant Argentine pesos as
from March 1, 2003. See Note 1 to the Audited Consolidated Financial
Statements.
|
(4)
|
Includes
Ps.1,350 million for the year ended December 31, 2007, Ps.1,451 million
for the year ended December 31, 2006, Ps.1,216 million for the year ended
December 31, 2005, Ps.1,122 million for the year ended December 31, 2004
and Ps.760 million for the year ended December 31, 2003 corresponding to
the proportional consolidation of the net sales of investees in which we
hold joint control with third parties. See Note 13(b) to the Audited
Consolidated Financial Statements.
|
(5)
|
Net
sales are net to us after payment of a fuel transfer tax, turnover tax
and, from 2002, customs duties on hydrocarbon exports. Royalties with
respect to our production are accounted for as a cost of production and
are not deducted in determining net sales. See Note 2(g) to the Audited
Consolidated Financial Statements.
|
(6)
|
Information
has been calculated based on outstanding capital stock of 393,312,793
shares. Each ADS represents one Class D share. There were no differences
between basic and diluted earnings per share and ADS for any of the years
disclosed.
|
(7)
|
Amounts
expressed in U.S. dollars are based on the exchange rate as of the date of
payment. For periods in which more than one dividend payment was made, the
amounts expressed in U.S. dollars are based on exchange rates at the date
of each payment.
|
(8)
|
Total
debt under Argentine GAAP includes nominal amounts of long-term debt of
Ps.523 million as of December 31, 2007, Ps.510 million as of December 31,
2006, Ps.1,107 million as of December 31, 2005, Ps.1,684 million as of
December 31, 2004 and Ps.2,085 million as of December 31,
2003.
|
(9)
|
Our
subscribed capital as of December 31, 2007 is represented by 393,312,793
shares of common stock and divided into four classes of shares, with a par
value of Ps.10 and one vote per share. These shares are fully subscribed,
paid-in and authorized for stock exchange
listing.
|
Low
|
High
|
Average
|
Period
End
|
|||||||||||||
(pesos
per U.S. dollar)
|
||||||||||||||||
Year
ended December 31,
|
||||||||||||||||
2003
|
2.76 | 3.35 | 2.94 | (1) | 2.93 | |||||||||||
2004
|
2.80 | 3.06 | 2.94 | (1) | 2.98 |
Low
|
High
|
Average
|
Period
End
|
|||||||||||||
(pesos
per U.S. dollar)
|
||||||||||||||||
2005
|
2.86 | 3.04 | 2.90 | (1) | 3.03 | |||||||||||
2006
|
3.03 | 3.10 | 3.07 | (1) | 3.06 | |||||||||||
2007
|
3.05 | 3.18 | 3.12 | (1) | 3.15 | |||||||||||
Month
|
||||||||||||||||
October 2007
|
3.15 | 3.18 | 3.16 | 3.15 | ||||||||||||
November
2007
|
3.12 | 3.15 | 3.14 | 3.15 | ||||||||||||
December
2007
|
3.13 | 3.15 | 3.14 | 3.15 | ||||||||||||
January
2008
|
3.13 | 3.16 | 3.14 | 3.16 | ||||||||||||
February
2008
|
3.15 | 3.17 | 3.16 | 3.16 | ||||||||||||
March
2008
|
3.14 | 3.17 | 3.16 | 3.17 | ||||||||||||
April
2008(2)
|
3.16 | 3.17 | 3.16 | 3.16 |
(1)
|
Represents
the average of the exchange rates on the last day of each month during the
period.
|
(2)
|
Through
April 10, 2008.
|
·
|
limitations on our ability to pass
increases in international prices of crude
oil and other hydrocarbon fuels and exchange rate fluctuations through to
domestic prices, or to increase local prices of natural gas (in particular
for residential customers), gasoline and
diesel;
|
·
|
higher taxes on exports of
hydrocarbons;
|
·
|
restrictions on hydrocarbon export
volumes driven mainly by the requirement to satisfy domestic
demand;
|
·
|
in connection with the Argentine
government’s policy to provide absolute priority to domestic demand,
regulatory orders to supply natural gas and other hydrocarbon products to
the domestic retail market in excess of previously contracted
amounts;
|
·
|
the
import of certain hydrocarbon fuels at international market prices to
satisfy domestic demand at significantly lower domestic
prices;
|
·
|
regulatory developments leading to
the imposition of stricter supply requirements, fines or other actions by
governmental authorities in response to fuel shortages at service
stations;
|
·
|
the implementation or imposition
of stricter quality requirements for petroleum products in Argentina;
and
|
·
|
higher taxes on domestic fuel
sales not compensated by price
increases.
|
·
|
the results of drilling, testing
and production after the date of the estimates, which may require
substantial revisions;
|
·
|
the quality of available
geological, technical and economic data and the interpretation and
judgment of such
data;
|
·
|
the production performance of our
reservoirs;
|
·
|
developments such as acquisitions
and dispositions, new discoveries and extensions of existing fields and
the application of improved recovery
techniques;
|
·
|
changes in oil and natural gas
prices, which could have an effect on the size of our proved reserves
because the estimates of reserves are based on prices and costs at the
date when such estimates are made, and a decline in the price of oil or
gas could make reserves no longer economically viable to exploit and
therefore not classifiable as proved;
and
|
·
|
whether the prevailing tax rules,
other government regulations and contractual conditions will remain the
same as on the date estimates are made (as changes in tax rules and other government
regulations could make reserves no longer economically viable to
exploit).
|
·
|
We
operate more than 70 oil and gas fields in Argentina, accounting for
approximately 42% of the country’s total production of crude oil,
excluding natural gas liquids, and approximately 42% of its total natural
gas production, including natural gas liquids, in 2007, according to the
Argentine Secretariat of Energy.
|
·
|
We
had proved reserves, as estimated as of December 31, 2007, of
approximately 623 mmbbl of oil and 3,708 bcf of gas, representing
aggregate reserves of 1,283 mmboe.
|
·
|
In
2007, we produced 120 mmbbl of oil (329 mbbl/d) and 635 bcf of gas
(1,740 mmcf/d).
|
·
|
We
are Argentina’s leading refiner with operations conducted at three wholly
owned refineries with combined annual refining capacity of approximately
116 mmbbl (319.5 mbbl/d). We also have a 50% interest in Refinor, a
jointly controlled entity operated by Petrobras Energía S.A., which has a
refining capacity of 26.1 mbbl/d.
|
·
|
Our
retail distribution network for automotive petroleum products as of
December 31, 2007 consisted of 1,692 YPF-branded service stations, which
we believe represented approximately 31.1% of all service stations in
Argentina.
|
·
|
We
are a leading petrochemical producer in Argentina and in the Southern Cone
of Latin America, with operations conducted through our Ensenada plant. In
addition, Profertil, a company that we jointly control, is a leading
producer of urea in the Southern
Cone.
|
·
|
Exploration
and Production;
|
·
|
Refining
and Marketing; and
|
·
|
Chemical.
|
For
the Year Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
(in
millions of pesos)
|
||||||||||||
Net
Sales(1)
|
||||||||||||
Exploration
and Production(2)(3)
|
||||||||||||
To
unrelated parties
|
3,288 | 3,076 | 2,910 | |||||||||
To
related parties
|
724 | 774 | 626 | |||||||||
Intersegment
sales and fees(3)
|
14,056 | 14,033 | 11,659 | |||||||||
Total
Exploration and Production
|
18,068 | 17,883 | 15,195 | |||||||||
Refining
and Marketing(4)
|
||||||||||||
To
unrelated parties
|
20,375 | 17,651 | 15,791 | |||||||||
To
related parties
|
2,045 | 1,624 | 1,425 | |||||||||
Intersegment
sales and fees
|
1,858 | 1,526 | 962 | |||||||||
Total
Refining and Marketing
|
24,278 | 20,801 | 18,178 | |||||||||
Chemical
|
||||||||||||
To
unrelated parties
|
2,563 | 2,401 | 2,062 | |||||||||
Intersegment
sales and fees
|
892 | 647 | 207 | |||||||||
Total
Chemical
|
3,455 | 3,048 | 2,269 | |||||||||
Corporate
and Other
|
||||||||||||
To
unrelated parties
|
109 | 109 | 87 | |||||||||
Intersegment
sales and fees
|
440 | 282 | 243 | |||||||||
Total
Corporate and Others
|
549 | 391 | 330 | |||||||||
Less
intersegment sales and fees
|
(17,246 | ) | (16,488 | ) | (13,071 | ) | ||||||
Total
net sales(5)
|
29,104 | 25,635 | 22,901 | |||||||||
Operating
Income (Loss)
|
||||||||||||
Exploration
and Production
|
5,679 | 6,564 | 7,140 | |||||||||
Refining
and Marketing
|
1,234 | 258 | 1,900 | |||||||||
Chemical
|
500 | 572 | 542 | |||||||||
Corporate
and Other
|
(620 | ) | (540 | ) | (451 | ) | ||||||
Consolidation
adjustments
|
(136 | ) | 29 | 30 | ||||||||
Total
operating income
|
6,657 | 6,883 | 9,161 |
(1)
|
Net
sales are net to us after payment of a fuel transfer tax, turnover tax and
customs duties on exports. Royalties with respect to our production are
accounted for as a cost of production and are not deducted in determining
net sales. See Note 2 (g) to the Audited Consolidated Financial
Statements.
|
(2)
|
Includes
exploration and production operations in Argentina and the United
States.
|
(3)
|
Intersegment
sales of crude oil to Refining and Marketing are recorded at transfer
prices established by us, which generally seek to approximate Argentine
market prices.
|
(4)
|
Includes
LPG activities.
|
(5)
|
Total
net sales include export sales of Ps.8,400 million, Ps.8,649 million, and
Ps.8,644 million for the years ended December 31, 2007, 2006 and 2005,
respectively. The export sales were mainly to the United States,
Brazil and Chile.
|
Wells
|
Acreage
|
|||||||||||||||||||||||||||||||
Oil
|
Gas
|
Production
Concessions(1)
|
Exploration
Permits(1)
|
|||||||||||||||||||||||||||||
Gross(2)
|
Net(2)
|
Gross(2)
|
Net(2)
|
Gross(2)
|
Net(2)
|
Gross(2)
|
Net(2)
|
|||||||||||||||||||||||||
Onshore
|
(thousands
of acres)
|
|||||||||||||||||||||||||||||||
Neuquina
|
3,288 | 2,811 | 575 | 418 | 4,008 | 3,114 | 1,478 | 1,246 | ||||||||||||||||||||||||
Golfo
San Jorge
|
6,805 | 5,975 | 51 | 50 | 2,472 | 2,347 | 4,927 | 2,464 | ||||||||||||||||||||||||
Cuyana
|
805 | 627 | — | — | 427 | 375 | 2,157 | 1,861 | ||||||||||||||||||||||||
Noroeste
|
29 | 8 | 47 | 15 | 1,329 | 372 | — | — | ||||||||||||||||||||||||
Austral
|
120 | 37 | 54 | 16 | 602 | 181 | — | — | ||||||||||||||||||||||||
Offshore
|
5 | 2 | — | — | 115 | 63 | 18,920 | 6,625 |
(1)
|
Production
concessions are granted after commercially exploitable quantities of oil
or gas are discovered, are based upon the estimated field size as
determined by geological and geophysical techniques and are subject to
adjustment based upon new information concerning the reservoir.
Accordingly, not all acreage covered by production concessions is, in
fact, producing. Acreage held under exploration permits is unproved and
non-producing.
|
(2)
|
“Gross”
wells and acreage include all wells and acreage in which we have an
interest. “Net” wells and acreage equals gross wells and acreage after
deducting third party interests.
|
Production
2007
|
Reserves
as December 31, 2007
|
Development
stage of the area
|
||||||||||||||||||||||||
Areas
(1)
|
Interest
|
Oil
(mbbl)
|
Gas
(mmcf)
|
Oil
(Mbbl)
|
Gas
(mmcf)
|
BOE
(mboe)
|
Basin/Location
|
|||||||||||||||||||
Barrancas
|
100 | % | 2,218 | 75 | 16,377 | 574 | 16,479 |
Cuyana
|
Mature
Field
|
|||||||||||||||||
Cerro
Fortunoso
|
100 | % | 1,871 | — | 9,287 | 0 | 9,287 |
Neuquina
|
Mature
Field
|
|||||||||||||||||
La
Ventana
|
(2 | ) | 1,988 | 269 | 13,983 | 1,896 | 14,321 |
Cuyana
|
Mature
Field
|
|||||||||||||||||
Vizcacheras
|
100 | % | 3,594 | 351 | 25,748 | 2,117 | 26,125 |
Cuyana
|
Mature
Field
|
|||||||||||||||||
El
Portón-Chihuido La Salina
|
100 | % | 12,661 | 58,660 | 58,416 | 351,645 | 121,042 |
Neuquina
|
Mature
Field
|
|||||||||||||||||
Chihuido
Sierra Negra
|
100 | % | 10,783 | 1,903 | 45,817 | 7,548 | 47,161 |
Neuquina
|
Mature
Field
|
|||||||||||||||||
Paso
Bardas Norte
|
100 | % | 302 | 13,367 | 329 | 45,086 | 8,359 |
Neuquina
|
Mature
Field
|
|||||||||||||||||
Señal
Picada
|
100 | % | 2,156 | 150 | 18,323 | 1,135 | 18,525 |
Neuquina
|
Mature
Field
|
|||||||||||||||||
Aguada
Toledo – Sierra Barrosa
|
100 | % | 813 | 52,909 | 7,690 | 177,190 | 39,247 |
Neuquina
|
Mature
Field
|
|||||||||||||||||
Loma
la Lata
|
100 | % | 17,066 | 271,057 | 92,411 | 1,840,126 | 420,127 |
Neuquina
|
Mature
Field
|
|||||||||||||||||
El
Trébol
|
100 | % | 2,132 | 318 | 11,285 | 1,075 | 11,477 |
Golfo
San Jorge
|
Mature
Field
|
|||||||||||||||||
Manantiales
Behr
|
100 | % | 5,885 | 3,998 | 23,428 | 9,843 | 25,182 |
Golfo
San Jorge
|
Mature
Field
|
|||||||||||||||||
Seco
León
|
100 | % | 3,502 | 3,812 | 19,953 | 16,069 | 22,815 |
Golfo
San Jorge
|
Mature
Field
|
|||||||||||||||||
Barranca
Baya
|
100 | % | 4,157 | 853 | 20,757 | 3,767 | 21,428 |
Golfo
San Jorge
|
Mature
Field
|
|||||||||||||||||
Lomas
del Cuy
|
100 | % | 3,344 | 2,079 | 13,415 | 6,946 | 14,652 |
Golfo
San Jorge
|
Mature
Field
|
|||||||||||||||||
Los
Perales
|
100 | % | 7,962 | 22,149 | 34,680 | 46,150 | 42,899 |
Golfo
San Jorge
|
Mature
Field
|
(1)
|
Exploitation
areas.
|
(2)
|
69.6%
for crude oil and 60% for natural gas liquids and natural
gas.
|
For
the Year Ended December 31,
|
||||||||||||
2007
|
2006
|
2005
|
||||||||||
Gross
wells drilled(1)
|
||||||||||||
Exploratory
|
||||||||||||
Oil
|
4 | 1 | 6 | |||||||||
Gas
|
2 | 1 | 1 | |||||||||
Dry
|
17 | 17 | 7 | |||||||||
Total
|
23 | 19 | 14 | |||||||||
Development
|
||||||||||||
Oil
|
622 | 703 | 632 | |||||||||
Gas
|
75 | 42 | 34 | |||||||||
Dry
|
14 | 12 | 18 | |||||||||
Total
|
711 | 757 | 684 | |||||||||
Net
wells drilled(1)
|
||||||||||||
Exploratory
|
||||||||||||
Oil
|
4 | 1 | 5 | |||||||||
Gas
|
1 | 1 | – | |||||||||
Dry
|
12 | 13 | 5 | |||||||||
Total
|
17 | 15 | 10 | |||||||||
Development
|
||||||||||||
Oil
|
488 | 580 | 485 | |||||||||
Gas
|
51 | 15 | 17 | |||||||||
Dry
|
13 | 10 | 16 | |||||||||
Total
|
552 | 605 | 518 |
(1)
|
“Gross”
wells means all wells in which we have an interest. “Net” wells means
gross wells after deducting interests of
others.
|
Crude
Oil(1)
|
Gas
|
Combined(2)
|
||||||||||
(millions
of barrels)
|
(Bcf)
|
(boe
in millions)
|
||||||||||
Proved
Developed and Undeveloped Reserves
|
||||||||||||
Reserves
as of December 31, 2005
|
777 | 4,683 | 1,611 | |||||||||
Revisions
of previous estimates(3)
|
9 | (63 | ) | (2 | ) | |||||||
Extensions,
discoveries and improved recovery
|
20 | 46 | 29 | |||||||||
Production
for the year
|
(126 | ) | (651 | ) | (242 | ) | ||||||
Reserves
as of December 31, 2006
|
680 | 4,015 | 1,396 | |||||||||
Revisions
of previous estimates(3)
|
46 | 319 | 100 | |||||||||
Extensions,
discoveries and improved recovery
|
17 | 9 | 19 | |||||||||
Production
for the period
|
(120 | ) | (635 | ) | (232 | ) | ||||||
Reserves
as of December 31, 2007
|
623 | 3,708 | 1,283 | |||||||||
Proved
Developed Reserves
|
||||||||||||
As
of December 31, 2005
|
604 | 3,201 | 1,174 | |||||||||
As
of December 31, 2006
|
521 | 2,571 | 979 | |||||||||
As
of December 31, 2007
|
460 | 2,441 | 895 |
(1)
|
Includes
crude oil, condensate and natural gas
liquids.
|
(2)
|
Volumes
of gas in the table above and elsewhere in this annual report have been
converted to boe at 5.615 mcf per
barrel.
|
(3)
|
Revisions
in estimates of reserves are performed at least once a year. Revision of
oil and gas proved reserves are considered prospectively in the
calculation of depreciation.
|
·
|
In
the Noroeste basin, 9.2 billion cubic feet of gas were removed
fundamentally due to the low production behavior of the Campo Durán
(Tupambi) deposit in the Aguaragüe
area.
|
·
|
In
the Cuyana basin, except for the inclusion of 0.7 million barrels of oil
due to the upgrading of recovery systems at the Estructura Cruz de Piedra
deposit, all the other areas showed low production behavior and gave rise
to an overall removal of 4.6 million barrels of
oil.
|
·
|
In
the Neuquina basin, the primary upward revisions were made in the Aguada
Toledo-Sierra Barrosa area, where 52.9 billion cubic feet of gas reserves
were added due to the implementation of low compression, the repair of a
well and the adjustment update of the material
balance.
|
·
|
In
the Paso Bardas Norte area, 3.7 billion cubic feet of gas reserves were
added due to the adjustment of the Materials Balance in the Huitrín La
Tosca deposit and in the Piedras Negras area, and 3.1 billion cubic feet
of gas were reclassified as proved following the signing of a gas contract
for electric power generation.
|
·
|
The
primary downward revisions in this basin occurred in the Puesto Cortadera,
Rincón del Mangrullo and Loma La Lata-Lotena deposits. Overall, 56.1
billion cubic feet of proved gas reserves were removed due to the adverse
effect of some wells and the corresponding adjustment of estimates. In the
Filo Morado area within the Faja Plegada, a downward revision of 23
billion cubic feet of gas and 1.6 million barrels of oil was made due to
production behavior.
|
·
|
In
Southern Argentina, the positive results of development drilling
(primarily in the areas of Manantiales Behr, Zona Cental-Bella Vista Este,
Escalante, El Trébol, Las Heras and Lomas del Cuy) in locations adjacent
to the production areas, classified as not proved due to their geological
uncertainty and to the fields’ improved production response, resulted in
the inclusion of 5.5 million barrels of oil and 4.2 billion cubic feet of
gas into proved reserves.
|
·
|
In
the Noroeste basin, in the Acambuco area, 74.7 billion cubic feet of
natural gas and 1.5 million barrels of oil, condensate and natural gas
liquids were added to proved reserves by the production performance of
well Mac-1001-bis in Macueta reservoir, which in turn provided a basis for
considering the two neighboring wells, Mac.x-1002 and Mac.e-1003, as
proved undeveloped reserves. The reserves of San Pedrito reservoir were
revised downwards as a result of a more extensive material-balance study
performed by YPF and 28.4 billion cubic feet of gas and 0.1 million
barrels of condensate were removed from proved
reserves.
|
·
|
In
the Aguaragüe area, 23.7 billion cubic feet of gas were added to proved
reserves in Santa Rosa–Icla reservoir. The increase was mainly in proved
undeveloped reserves and is related to volumetric studies conducted in
areas where new drilling activity is to be performed in 2009 and
2010.
|
·
|
In
the Loma La Lata-Sierras Blancas reservoir, the revision of the
development plan for the southeastern and northeastern parts of the field,
in conjunction with a general improvement in production performance,
resulted in the addition of 168.8 billion cubic feet of gas and 9.1
million barrels of associated liquids to proved
reserves.
|
·
|
In
the San Roque area, in accordance with a new evaluation of the fields,
54.0 billion cubic feet of gas and 3.0 million barrels of associated
liquids in Aguada San Roque reservoir, as well as 50.0 billion cubic feet
of gas and 3.2 million barrels of associated liquids in Loma las Yeguas
reservoir, were added to proved reserves. The addition was mostly to
proved undeveloped reserves and in both cases was related to the planned
installation of compression facilities scheduled for mid
2008.
|
·
|
In
the CNQ7A area, proved reserves were increased by 6.7 million barrels of
oil because of the general revaluation of reserves performed in conformity
with the development plans for the four reservoirs. These plans, which
include the drilling and workover of more than 350 wells, are being
implemented by the operator.
|
·
|
In
Golfo San Jorge basin fields, the positive results of development drilling
(primarily in the areas of Manantiales Behr, Cañadón Vasco and Cañadón
Perdido) in locations adjacent to the production areas, previously
classified as non-proved due to their geological uncertainty, and to the
fields’ improved production response, resulted in the inclusion of 2.3
million barrels of oil in proved
reserves.
|
·
|
The
production performance in some of the south areas has been adversely
affected by the closing of injection wells due to corrosion problems which
has caused a downward deviation in current production estimates. Secondary
production decreased for that reason in some areas, but primary production
increased in others, mainly in Barranca Baya, Escalante and Tierra del
Fuego areas, with these effects practically offsetting one another. The
temporary closing of injector wells resulted in the recategorization of
certain proved developed production oil reserves into proved developed
non-productive and proved undeveloped oil reserves. The downward revisions
resulted in a reduction of 1.2 million barrels of oil in proved
reserves.
|
·
|
Those
reserves that were booked since 2003, without a development program for
the next two years, were taken out, resulting in the removal of 4.0
million barrels from proved oil reserves, mainly in Los Perales, Barranca
Baya and Manantiales Behr fields.
|
·
|
The
anti-clinical structure of Tertiary sandstone discovered in 2006 in the
Cerro Piedra field in the Southern region has been in production
throughout 2007. The new pressure analysis shows that dry gas reserves
increased by 4.2 billion cubic
feet.
|
·
|
The
delay in various development plans resulted in the removal of 1.6 million
barrels of proved oil reserves because production would be beyond the
concession expiration date.
|
·
|
In
Austral basin, in CAM 2 A Sur area, the well Poseidón-112 was flooded and
thus closed down, resulting in a net proved reserve decrease of 0.6
million boe.
|
·
|
In
Neptune (USA), the delineation and development activity carried out has
produced new information about the geological and petrophysical parameters
which differs, in some cases, from previous estimates, leading to a
negative revision of 574 mboe of proved reserves, comprised of negative
revisions of 0.7 billion cubic feet of gas and 452 mbbl of oil. The
revised figures are in line with the estimate of
GCA.
|
·
|
lack
of proper understanding of and training on the requirements of the SEC for
booking proved reserves;
|
·
|
undue
optimism regarding the technical performance of the fields and focus on
replacement ratio;
|
·
|
absence
of a meaningful deliberative process for determining proved reserves and
resolving disputes; and
|
·
|
unwillingness
to accept personal responsibility for reporting internally adverse facts
regarding reserves and a corresponding tendency to view such issues as
falling within another person’s or department’s jurisdiction. Over time,
problems emerged and grew in the absence of delineation of
responsibilities for booking proved reserves and in the absence of clear
directives pre-2005.
|
Oil
|
||||||||
Proved
developed and undeveloped reserves
|
Proved
developed reserves
|
|||||||
(Millions
of barrels)
|
||||||||
As
originally reported as of December 31
|
1,114 | 908 | ||||||
Effect
of the adjustment
As
of beginning of year
|
(67 | ) | (63 | ) | ||||
Movement
during the year
|
17 | 18 | ||||||
Total
|
(50 | ) | (45 | ) | ||||
As
restated as of December 31
|
1,064 | 863 |
Gas
|
||||||||
Proved
developed and undeveloped reserves
|
Proved
developed reserves
|
|||||||
(Billions
of cubic feet)
|
||||||||
As
originally reported as of December 31
|
6,820 | 5,041 | ||||||
Effect
of the adjustment
As
of beginning of year
|
(1,531 | ) | (1,383 | ) | ||||
Movement
during the year
|
387 | 387 | ||||||
Total
|
(1,144 | ) | (996 | ) | ||||
As
restated as of December 31
|
5,676 | 4,045 |