Argentine state-owned oil company YPF SA is looking to sell several businesses and assets as its divestment plan, which aims to focus its efforts on the much-vaunted Vaca Muerta shale oil field, gains momentum.
YPF is receiving offers for its businesses in Brazil and Chile, where the company sells refined products such as lubricants and jet fuel, CEO Horacio Marín said on Friday during a conference call on quarterly results.
Argentina’s largest oil and gas producer has also begun selling its 50 percent stake in refinery Refinor. The company has also committed to divesting a 70 percent stake in natural gas utility Metrogas SA – but only after President Javier Milei’s free-market reforms, which include utility price increases, boost Metrogas’ value.
This is all part of a strategy to streamline YPF and boost the company’s share price by prioritizing drilling at Vaca Muerta. YPF expects to complete the sale of aging conventional oil fields in the second half of the year, freeing up hundreds of millions of dollars to invest in shale oil production.
Shale oil accounted for 52 percent of YPF’s production in the second quarter, or 539,000 barrels of oil per day, compared to 45 percent in the same period last year. Industry plans, which the company is pushing for a new shale oil pipeline, are also moving forward. Drillers are already negotiating to use two-thirds of capacity, Marín said. The shale fields that Exxon Mobil Cor. has put up for sale in Argentina are a good bet for YPF, but Marín declined to comment further on the confidential bidding process.
YPF is not abandoning all of its non-core businesses. Marín said the company will keep its 50 percent stake in Profertil SA, which converts natural gas into fertilizer, and will look for a new partner to help it boost production there, as Canadian giant Nutrien Ltd has its eye on it. Its research and development arm Y-TEC will not be sold either, but it will have a strict mandate to work on shale oil extraction projects, slimming down its portfolio that included agriculture and the energy transition.
“Our goal is to increase your profits,” Marin said on the conference call with investors. “There is no other goal.”
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by Jonathan Gilbert, Bloomberg
