Equinor Engages YPF in Potential Sale of Argentine Shale Assets

Equinor ASA is in early discussions to sell stakes in Argentine shale assets to YPF SA, its joint venture partner. This move coincides with Argentina’s push for increased oil production under President Javier Milei’s administration, despite risks that have seen other foreign companies reduce their investments.

Equinor ASA has engaged in preliminary discussions regarding the sale of stakes in its Argentine shale oil assets to its partner YPF SA, a state-run oil company. The talks have been characterized as early-stage, with YPF noted to possess preferential rights in any potential divestiture process. This information was relayed by an anonymous source due to the private nature of the discussions.

As the largest oil company in Norway, Equinor has initiated a process aimed at valuing and assessing these assets. Reports from Argentine energy publication EconoJournal indicate that Equinor has officially begun its effort to divest these shale assets.

The new market-friendly policies implemented by Argentine President Javier Milei are fostering growth within the Vaca Muerta shale region. The government is striving for an ambitious target of producing one million barrels of crude oil daily in the coming years, a volume more than double the current output.

Under the leadership of President Milei’s appointed management team, YPF is concentrating its activities on the shale sector while divesting from older, conventional oil fields. Recently, YPF established a remote shale-operations center in Buenos Aires and acquired a majority stake in a shale-gas field from Exxon Mobil Corp and Qatar Energy for approximately US$300 million.

Despite these developments, the risks associated with operating in Argentina have prompted various foreign oil companies to withdraw or limit their investments in the country, thereby leaving local firms to explore the shale areas. Equinor currently holds a 30 percent stake in the Bandurria Sur region, which is central to YPF’s shale production, while YPF owns 40 percent of that area. The two companies jointly own 50 percent of the Bajo del Toro project, situated further north in a less-developed, exploratory region.

Equinor ASA’s preliminary discussions with YPF SA regarding the sale of stakes in Argentine shale assets highlight the complexities of the current energy landscape in Argentina, particularly in the Vaca Muerta region. While President Javier Milei’s policies appear to be promoting growth, risks remain for foreign investors. The outcome of these discussions and potential divestments may significantly impact the local energy market.

Original Source: www.batimes.com.ar