YPF, Argentina’s energy company, plans to divest offshore exploration projects, focusing on a major LNG initiative targeting 2027 exports. With an aim to cut downstream costs by $512 million through 2026, YPF reported a profit increase and will invest $5 billion in alignment with future goals.
Argentina’s state-controlled energy company, YPF, is accelerating a divestiture plan that involves selling controlling stakes in offshore exploration projects in both Argentina and Uruguay. This move also includes reducing its investments in mature fields and potentially divesting a gas distribution company, as stated by CEO Horacio Marin. YPF holds exploration rights in seven offshore areas—six in Argentina and one in Uruguay.
As YPF enhances oil and gas production in the Vaca Muerta formation, its focus is shifting towards significant developments, particularly a massive liquefied natural gas (LNG) project aiming for its first exports in 2027. YPF is currently in discussions with a foreign oil major to divest part of its stake in a Uruguayan exploration block, which may also be offered in a bidding round.
The company plans to finalize investment decisions for its first floating LNG facility by June, which will support an initial production capacity of 6 million metric tons per year through one or two vessels. YPF aims to maintain a stake of 25% to 30% in the LNG initiative, which is designed for a total capacity of 30 million metric tons per year and may involve oil giant Shell as a key partner.
Last year, YPF successfully cut $405 million in downstream costs and anticipates further reductions of $512 million through 2026. The company’s profit surged to $2.39 billion from a loss of $1.28 billion the previous year, with planned investments of approximately $5 billion this year, aligning with projections for 2024.
YPF is implementing a strategic divestiture plan to streamline operations by selling offshore exploration stakes and reducing investments in mature fields. The company aims to focus on its LNG projects, targeting significant cost reductions while boosting profitability. YPF’s commitment to invest $5 billion this year positions it well for future growth and the upcoming launch of LNG exports.
Original Source: www.marketscreener.com
