Equinor ASA is considering divesting its stakes in Argentine shale oil assets to its partner YPF SA, a state-run company. YPF has preferential rights in this divestment process. The government’s supportive policies aim to boost production significantly in the Vaca Muerta region. However, risks in the country have caused many foreign firms to reduce or exit their investments, leaving local companies to thrive.
Equinor ASA is in preliminary discussions to sell stakes in its Argentine shale oil assets to YPF SA, its joint venture partner and state-owned oil company. This development comes as YPF has preferential rights should any divestment occur. Reports indicate that Equinor has initiated steps to evaluate and assess the value of these assets while aiming to understand the potential implications of this transaction.
Argentina’s energy landscape is buoyed by the policies of President Javier Milei, which are catalyzing growth in the Vaca Muerta shale region. With an ambitious goal to increase crude production to one million barrels per day, more than double the current output, the government is actively supporting expansion efforts. YPF is focusing resources on shale development while divesting aging conventional oil fields and has made significant investments, including acquiring a majority stake in a shale-gas field from Exxon Mobil Corp and Qatar Energy for approximately $300 million.
However, the complexities and risks of operating in Argentina have prompted many foreign oil companies to either exit the market or maintain minimal investments, leaving local operators to dominate the shale sector. Equinor currently holds a 30 percent interest in the Bandurria Sur area, which is integral to YPF’s shale operations, with YPF owning the remaining 40 percent. Both firms are also equal participants in the Bajo del Toro project located in a less developed exploratory region further north.
In summary, Equinor ASA is exploring the potential sale of its Argentine shale assets to YPF SA, amidst policies fostering significant growth in the Vaca Muerta region. While YPF intensifies its focus on shale, the risk of operating in Argentina has led other foreign entities to reassess their investment strategies. The situation unfolds in a vital energy landscape where local players increasingly dominate amid foreign exits.
Original Source: www.batimes.com.ar
