Equinor is in early negotiations to sell its stakes in Argentinian shale assets to the state oil company YPF. The decision aligns with the company’s strategy of divesting non-core operations while focusing on oil and gas amid changing market conditions following the election of a business-friendly government.
Norway’s Equinor has engaged in preliminary discussions regarding the sale of its stakes in Argentinian shale operations to YP, the state-owned oil entity and joint venture partner. The company, which entered the Argentinian market in the 2010s, holds both offshore and onshore interests, including an exploration license and a producing block within the significant Vaca Muerta shale formation located in Neuquen province.
Equinor intends to divest its stakes in Argentina’s shale sector, having initiated a process to assess these assets. The state firm YPF possesses the right of first refusal on any potential sale, as noted by industry sources. This strategic move aligns with broader trends among European oil and gas companies, which are increasingly shifting focus back to oil and gas and reducing their investments in renewable energy.
The decision to sell shale assets in Argentina may reflect Equinor’s view of the operation as peripheral to its core business strategy. Interest in Vaca Muerta has surged under the administration of Javier Milei, the new business-friendly president. However, the government has announced the termination of state funding for critical infrastructure, compelling companies to seek private investments and new tax incentives in a revamped free-market environment, with additional emphasis on capital and foreign currency regulations.
In summary, Equinor is exploring the divestiture of its stake in Argentinian shale assets, specifically those in the Vaca Muerta formation, to state oil firm YPF. This shift reflects the company’s strategic reevaluation within a rapidly changing market landscape, particularly following new government policies aimed at attracting private investments in the energy sector. As the industry adapts to these developments, Equinor’s actions signal broader trends among major energy firms recalibrating their portfolios.
Original Source: oilprice.com
