Argentina’s national oil company YPF is advancing its divestment strategy, focusing on the Vaca Muerta shale formation, reported Bloomberg.
The company is currently accepting bids for its operations in Brazil and Chile, which include the sale of refined products such as lubricants and jet fuel.
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This move is part of YPF’s broader plan to concentrate resources on the lucrative shale patch, which is expected to significantly enhance the company’s share price.
On an earnings call, YPF CEO Horacio Marin announced that the company is in the process of selling a 50% stake in the refiner Refinor.
Additionally, YPF plans to divest a 70% stake in natural gas distributor Metrogas, timing the sale to coincide with the anticipated increase in value following Argentine President Javier Milei’s market reforms, which include utility price hikes.
The strategy aims to streamline YPF’s operations and allocate more funds to shale drilling in Vaca Muerta.
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By GlobalDataThe company anticipates completing the sale of its older conventional oil fields in the latter half of the year, potentially freeing up hundreds of millions of dollars for investment in shale.
Shale production has become increasingly important for YPF, accounting for 52% of its second-quarter output, which totalled the equivalent of 539,000 barrels of oil per day (bopd).
This marks an increase from 45% in the same period the previous year.
The company is also working on plans for a new shale oil pipeline, with negotiations already underway to fill two-thirds of its capacity, the CEO said.
While YPF is divesting certain assets, it is retaining others such as its 50% stake in Profertil, a company that converts natural gas into fertilisers.
YPF is seeking a new partner to increase production following the departure of Canadian company Nutrien.
The company’s research and development arm, Y-TEC, will also remain under YPF’s umbrella but will refocus its efforts exclusively on shale drilling projects.
“Our goal is to improve profits for you,” Marin was quoted as saying on the investor call. “There is no other goal.”
YPF is in talks with US-based Energy Transfer to secure financing for the Vaca Muerta Sur pipeline
The pipeline is expected to be a game-changer, enabling YPF to target exports of around 500,000bopd of shale oil by the end of the decade.
Current exports from Vaca Muerta are just over 100,000bopd, limited by logistical challenges and the need for truck transportation in some regions.
