YPF, Argentina’s energy company, plans to divest from offshore exploration projects and mature fields. The focus shifts to significant developments, particularly a liquefied natural gas project expected to commence exports in 2027. YPF aims to cut $512 million in downstream costs and invest $5 billion in 2023, building on a profitable year.
YPF, Argentina’s leading energy company, is accelerating plans to divest from offshore exploration projects in both Argentina and Uruguay. This strategy includes reducing its involvement in mature fields and preparing to sell a gas distribution subsidiary, as stated by CEO Horacio Marin. The firm holds exploration rights in seven offshore areas, six of which are situated off Argentina’s coast, with one located in Uruguay.
The divestiture aims to streamline operations as YPF increases oil and gas production in the Vaca Muerta formation, Argentina’s most prolific energy region. The company intends to concentrate on significant developments, particularly a large liquefied natural gas (LNG) project, which is expected to initiate the country’s first LNG exports by 2027.
YPF is currently negotiating with a prominent foreign oil company to sell part of its stake in a Uruguayan exploration block and is considering offering this and other offshore assets in a bidding round. Marin indicated that YPF would retain minority stakes in these ventures. Furthermore, a decision regarding the first floating LNG facility in Argentina should be finalized by June, aiming for an output capacity of 6 million metric tons per year through two production vessels.
YPF plans to maintain a 25% to 30% stake in its entire LNG project, which is being developed in three phases to reach a total capacity of 30 million metric tons per year, potentially featuring Shell as a key partner. Last year, YPF managed to cut $405 million in downstream costs and aims for an additional $512 million reduction by 2026. Following a successful recovery, the company’s profit increased to $2.39 billion, compared to a loss of $1.28 billion in the prior year. YPF plans to invest approximately $5 billion in 2023, aligning with expected figures for 2024.
In summary, YPF is actively pursuing a divestiture strategy focused on offshore exploration and mature fields to optimize its operations. The company aims to invest significantly in its LNG project, which is pivotal for Argentina’s energy future. With a robust financial recovery and strategic investments planned, YPF is positioning itself for sustainable growth in the coming years.
Original Source: www.marketscreener.com
