Argentina state oil firm YPF teams with Chevron to extract shale oil, gas.
| Autor | Gaudin, Andres |
Amid the most dire prognostications about the viability and development of Argentina's state oil company YPF, the government of President Cristina Fernandez de Kirchner signed an agreement on July 16 with Chevron, the US multinational oil giant, which could allow Argentina to achieve the long-sought-after goal of energy self-sufficiency by 2017.
Since the state renationalized the oil company in May 2012 (NotiSur, May 4, 2012), when it took over the shares that had been in the hands of the Spanish firm Repsol since 1992, YPF has been looking for partners able to invest the huge amount of capital needed to return to full operation and profitability a company that had been decimated in just two decades of private management.
The campaign by the government's powerful enemies, both internal and external, who referred to the renationalization as a "confiscation" of assets and systematically complained that Argentina lacked legal certainty for investing, along with the Spanish oil company's threats to file suit in international tribunals against any company making alliances with YPF, scared off several potential partners. In this context, the agreement with Chevron is a win for the government, although achieving it required concessions that had not been in the government's plans and that deviate from it original discourse.
The agreement between the two companies is aimed at the shared development of nonconventional hydrocarbon production in the Vaca Muerta area, an oil field in the Patagonian province of Neuquen, 1,200 km southwest of the Argentine capital of Buenos Aires.
For the US multinational, the agreement calls for an investment of US$1.24 billion by 2017; it will require drilling 1,500 wells, with output by that time estimated at 50 million barrels per day of oil and 3 million cubic meters of natural gas. YPF has already invested the equivalent of US$260 million in the field.
Vaca Muerta has huge potential for resolving energy needs
Describing the magnitude of the signed agreement, President Fernandez de Kirchner said that the figures are equivalent to 25% of the crude and 10% of the gas that YPF currently produces. "My decision to renationalize YPF was not capricious. I did it because we had gone from being a net exporter of fuel to being a net importer," said the president to illustrate clearly the rationale for her decision last year. If the objectives are fully realized, this area of 395 sq km--1.3% of the total area of Vaca...
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