YPF, Argentina’s energy company, is prioritizing a divestiture plan to sell stakes in offshore projects, mature fields, and a gas distribution company. The firm aims to concentrate on a major LNG project with initial exports set for 2027, having cut downstream costs and planning substantial investments.
Argentina’s energy company, YPF, is accelerating its divestiture strategy that entails selling controlling stakes in offshore exploration projects located in Argentina and Uruguay. The company also aims to minimize its involvement in mature fields and will consider selling a gas distribution entity, as stated by CEO Horacio Marin.
Currently, YPF holds exploration rights to seven offshore areas, six of which are along Argentina’s coast and one in Uruguay. With an increased focus on oil and gas production from the Vaca Muerta formation, YPF intends to concentrate on significant projects, notably a massive liquefied natural gas (LNG) initiative, which seeks to commence the nation’s initial LNG exports in 2027.
YPF is in negotiations with a foreign oil major to divest part of its stake in an exploration block in Uruguay, possibly alongside a bidding round for other offshore interests, according to Marin. The company intends to retain smaller stakes in these projects.
The final investment decision for the first floating LNG facility in Argentina is anticipated by June, which is crucial for the initial phase of the LNG project aiming for an output capacity of six million metric tons annually through two production vessels. YPF plans to maintain a stake of 25% to 30% in this overarching LNG initiative, with the total capacity projected at 30 million metric tons per year, potentially partnering with major oil entity Shell.
After achieving $405 million in downstream cost reductions last year, YPF aims to achieve further savings of $512 million by 2026. The company reported profits of $2.39 billion last year, a substantial turnaround from its prior loss of $1.28 billion. For this year, YPF plans to invest approximately $5 billion, aligning with anticipated figures for 2024.
YPF is executing a strategic divestiture plan to enhance its operational focus, particularly on large-scale LNG projects, alongside significant cost-saving measures. The anticipated LNG output capacity is a key driver for YPF’s future growth as it aims for sizeable investments while reducing outputs in certain areas. With a comprehensive strategy in place, YPF is poised to transition toward a more streamlined and focused operational model.
Original Source: www.marketscreener.com
