Equinor ASA is reportedly negotiating with YPF SA regarding the sale of stakes in its Argentine shale oil assets, as YPF holds preferential rights in such matters. Amid President Javier Milei’s push for increased shale production, Equinor is evaluating its assets while overall foreign investment in Argentina remains cautious due to operational risks. The future of shale development in Argentina may hinge on the outcomes of these discussions.
Equinor ASA is in discussions regarding the potential sale of stakes in its Argentine shale oil assets to its joint venture partner, state-operated YPF SA. Sources familiar with the situation indicate that these talks are in preliminary stages, and YPF, as a partner, holds preferential rights in any divestment activities. Moreover, Equinor, Norway’s leading oil company, is evaluating the value and state of its assets in Argentina.
A local energy publication, EconoJournal, reported that Equinor has initiated plans to divest its shale assets. President Javier Milei’s market-driven policies are accelerating growth in the Vaca Muerta shale region, with the government targeting a production goal of one million barrels of crude daily within the next few years, significantly more than the current output.
Under President Milei’s appointed management, YPF is concentrating on shale development while divesting from older, conventional oil fields. The company has recently established a remote operations center for shale at its Buenos Aires headquarters and acquired a controlling interest in a shale-gas field from Exxon Mobil Corp and Qatar Energy for approximately $300 million.
Nevertheless, many foreign oil companies have faced challenges operating in Argentina, leading to either their exit or minimal investment in the country, leaving domestic firms to develop the shale resources. Equinor possesses a 30 percent stake in the Bandurria Sur region, a significant area of YPF’s shale production, with YPF holding 40 percent. Furthermore, they each own 50 percent of the Bajo del Toro project, an exploratory site located further north.
In summary, Equinor ASA is exploring the sale of its Argentine shale assets to YPF SA amid the backdrop of changing energy policies under President Javier Milei. As Argentina aims for substantial increases in crude production, YPF’s strategic focus on shale and the challenges facing foreign investments present a complex landscape. Equinor’s engagement in the divestment process signifies a noteworthy shift in the dynamic of oil production within the region.
Original Source: www.batimes.com.ar
