Equinor ASA is negotiating with YPF SA regarding the sale of stakes in Argentine shale oil assets. YPF has preferential rights in this divestment process as Equinor evaluates the value of its holdings. The discussions coincide with increased government efforts to ramp up oil production in the Vaca Muerta region, despite several foreign companies’ exits from the Argentine market.
Equinor ASA is in discussions regarding the potential sale of stakes in its Argentine shale oil assets to YPF SA, its joint venture partner and state-run oil company. These initial talks have been disclosed by a source familiar with the situation, who requested anonymity due to the confidential nature of the negotiations. YPF has preferential rights to any divestment of these assets, emphasizing the company’s strategic interests in this domain.
As the largest oil company in Norway, Equinor is evaluating its options for the shale assets, according to another individual familiar with the matters at hand. Recent reports from Argentine energy media outlet EconoJournal indicate that Equinor has commenced a valuation process for these assets, reflecting a significant shift in its investment strategy within Argentina’s energy landscape.
The new market-driven policies under President Javier Milei are facilitating expansion within the Vaca Muerta shale region, with government targets aimed at reaching a daily production of one million barrels of crude oil. This objective aligns with YPF’s current strategic focus, which includes shedding older conventional oil fields while investing in shale operations, as evidenced by their new remote operations center and a major acquisition from Exxon Mobil Corp and Qatar Energy for approximately $300 million.
In spite of these developments, a challenging business environment has prompted a number of foreign oil companies to retreat from Argentina, resulting in a landscape where local operators dominate the shale sector. Equinor retains a 30 percent stake in the Bandurria Sur area, a key region in YPF’s shale portfolio, while both companies are equally invested in the Bajo del Toro project, situated in a more exploratory area to the north.
In summary, Equinor is actively considering the divestment of certain shale assets in Argentina, engaging with YPF regarding this matter. This potential transition comes amid broader efforts by the Argentine government to boost oil production and the strategic shifts of YPF in a recovering energy market.
In conclusion, Equinor ASA is exploring the sale of its stakes in Argentine shale assets to YPF, leveraging the latter’s preferential rights in the process. The shifts in Argentine energy policy under President Milei are contributing to a burgeoning shale sector, despite the challenges faced by foreign companies in the region. With strategic investments, YPF is solidifying its presence in the shale market while Equinor reassesses its portfolio in the face of these changes.
Original Source: www.batimes.com.ar
