The Argentine oil company YPF received offers from 80 companies to begin the process of selling 55 mature areas, which represent 60% of its conventional oil production and 40% of its gas production. In the coming months, the company aims to focus exclusively on unconventional production. Horacio Marín, president and CEO of YPF, estimates recovering production levels with the next investments in Vaca Muerta within a year.
In the 55 areas, YPF produces 90,000 barrels of oil per day (60% of its conventional production) and 6.5 million cubic meters of gas per day (40%). The process seeks the “cession or reversal” of the operation: in the most mature and less productive fields, the operation will be transferred to SME companies with long-term oil purchase contracts, while the areas that require greater investment will be put out to tender and They will go on sale.
Of the total for sale, 25 are about to reach an agreement with the governments of Santa Cruz and Tierra del Fuego for the provinces to assume the concessions in their territories. The remaining 30 areas are distributed in Mendoza, Chubut, Río Negro and Neuquén.
Next week, the oil company will announce the details of the offers received, but announced that 80 companies presented more than one purchase proposal. Among the interested parties are several oil services companies that could become producers, similar to how the Perez Companc Group and Pan American Energy (formerly Bridas, from the Bulgheroni family) emerged at the time.
The national oil company estimates that The total sale of these assets will generate approximately US$800 million, funds that will be allocated entirely to the development of unconventional production. This production method, based on fracking technology, emerged only 10 years ago and allows the hard rock of Vaca Muerta to be drilled with horizontal wells.
“Today is an important day because the proposals arrived [de compra] of mature fields. There were 80 companies interested. I have no idea about the results and I am not on the decision committee either, precisely to give transparency,” commented Horacio Marín, president and CEO of YPF, during a toast for Journalism Day in the Puerto Madero tower.
The sale, called Andes Project, is being managed by Santander bank and has a special committee at YPF in charge of evaluating the offers. The company plans to move forward with negotiations, signing agreements, approval and transfer of assets before the end of the year.
The objective of the rationalization is to optimize the conventional upstream portfolio, allowing YPF to concentrate on conventional and unconventional areas that offer greater profitability per dollar invested.
In this way, YPF will direct 80% of its investment to Vaca Muerta, where the most productive gas and oil production areas are located. “We don’t want YPF to be the stupid company in Argentina,” you hear YPF say.
The company explained that “mature fields” are those that have already exceeded their “optimal production” peak. As indicated, good practices in the oil industry establish that, for large-scale companies like YPF, “it is not efficient or profitable to produce oil in this type of deposits.” Instead, these fields are typically operated by smaller companies that can maintain business continuity more efficiently. (NA)
