The state oil and gas company of Argentina, YPF, plans to spend US$21.5 billion on new oil and gas production over the next five years, eyeing a 26-percent increase in crude oil production, company executives told Reuters.
The company will sell some assets to gather the funds necessary for the ambitious production-raising plan, and it will also enlist the help of other companies, which will contribute an estimated US$8.5 billion to its five-year investment program. No names were given, but the YPF executives hinted that there’s a new partnership to be announced for the company’s power-generation business.
YPF’s executives also suggested that the company should buy some power-generation assets from Brazil’s Petrobras, which is conducting a large-scale asset-sale program to slim down its huge debt load.
YPF is eager to stage a repeat of the U.S. shale oil and gas boom, the FT reported yesterday, aiming for a 150-percent increase in shale oil and gas production. Conventional oil and gas will not be neglected, however, with plans for a 5-percent annual rise in production by 2022, to 700,000 barrels of oil equivalent daily.
Argentina is in the throes of a serious energy deficit thanks to insufficient exploration up until just recently. The country is home to the second-largest shale reserves in the world, concentrated in the Vaca Muerta shale formation, which has become a major hotspot for Big Oil.
Exxon, BP, Total, and Chevron are among the companies that have already pledged substantial funds for oil and gas exploration and production in Vaca Muerta, which holds reserves estimated at 22.8 billion barrels of oil equivalent. Argentina also has 2.4 billion barrels of conventional oil reserves, and is also hoping to score major discoveries offshore, to which end it will schedule a bidding round next year. Hopes are that the pre-salt basin along the Brazilian coast could extend into the Argentine continental shelf.