YPF to sell 30 mature oil fields in order to focus on Vaca Muerta

The company received more than 60 offers and will now analyze the proposals and begin final negotiations

YPF closed the stage of receiving offers for the sale of its mature conventional blocks, within the framework of what they are calling the Andes Project.

According to the company, over 30 national and international companies were behind the more than 60 offers tendered for the oil fields. “It shows the interest and success of the company’s offer in the market,” the company said. At the time of closing, there were almost 80 offers in total.

Over the next two weeks, YPF will analyze the proposals and initiate final negotiations aimed at signing agreements for the transfer of assets during the second semester. “The Santander Bank, along with YPF, is carrying out this entire process to guarantee the transparency and independence of the decisions that are made,” YPF sources said.

The Andes Project extends to 30 conventional areas grouped into 11 clusters in the provinces of Mendoza, Neuquén, Río Negro, and Chubut. The Herald’s sister publication, Ámbito, learned that all clusters received offers and generated interest from participating companies. In total, 55 areas are set to be divested if the areas of Santa Cruz and Tierra del Fuego are taken into account, which passed jurisdiction from the provinces in a reversion process.

The initiative is one of the four pillars of YPF’s 4×4 strategic plan, which seeks to optimize the upstream portfolio by concentrating investment in the conventional and unconventional areas that generate the greatest value for the company and its shareholders and are more in line with its scale.

The objective of YPF’s president and CEO, Horacio Marín, is to concentrate all efforts on Vaca Muerta and allow smaller companies to develop mature fields, which, although they have been in production for many years, still have much more to give.

According to YPF, “good oil industry practices establish that, for companies of [this] scale, it is neither efficient nor profitable to produce oil in this type of reservoirs, which are generally operated by smaller operators that can continue the activity.”

What is the 4×4 Plan for YPF 

The new strategy, called the “4×4 Plan,” seeks to turn YPF into a “world-class” energy company and transform the country into a major hydrocarbon exporter by 2030.

The oil company’s goal is to increase hydrocarbon exports to US$30 billion by 2029 and raise YPF’s share price on Wall Street from the current US$16.40 to US$60. “If it reaches US$50, we will celebrate big anyway,” admitted a senior executive during the plan presentation last March.

“Argentina is currently inefficient with conventional [oil]; we are 50-50 with shale, and that’s why we are going to divest without breaking social peace. We want to reach an 80-20 in favor of non-conventional [oil],” an YPF source stated. 

Originally published in Ámbito


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