Equinor is engaged in discussions to sell its stakes in Argentinian shale operations to YPF, its joint venture partner. The company has initiated a process to evaluate these assets, reflecting a strategic realignment away from renewable energy investments. Increased interest in Argentina’s Vaca Muerta region is noted, coinciding with new government policies under President Javier Milei.
Norwegian energy major Equinor is reportedly in preliminary discussions regarding the sale of its stakes in Argentinian shale assets to YPF, Argentina’s state-owned oil company, its partner in the joint venture, according to sources cited by Bloomberg. Equinor’s interest in the country began in the 2010s and includes both offshore and onshore assets, with specific holdings in the Vaca Muerta shale formation located in Neuquen province.
Given its joint venture with YPF and the latter’s right of first refusal for any stake sales, Equinor is considering divesting its interests. The company has launched an evaluation process for these assets, as part of a broader shift among European oil and gas companies towards prioritizing cash flows and shareholder returns over renewable investments.
Equinor’s potential sale signifies a determination that its Argentinian operations may not align with its current business strategy. Investor interest in the Vaca Muerta region has surged since the election of President Javier Milei, who promotes a business-friendly environment. However, the government has ceased state funding for infrastructure, prompting companies to seek private investments and favorable conditions for capital inflow before making substantial investments.
In summary, Equinor is considering divesting its Argentinian shale assets in light of shifting business priorities and market conditions. The company’s talks with YPF highlight the complexities of operating within Argentina’s evolving economic landscape, characterized by the new government’s policies. As focus shifts towards increasing cash flows and returns to shareholders, Equinor’s actions reflect a broader trend among European energy firms to recalibrate their investment strategies.
Original Source: oilprice.com
