State-run Argentine energy giant YPF SA announced a US$25-billion project to accelerate oil production, marking the largest investment since President Javier Milei took office.
Chief Executive Officer Horacio Marin said YPF submitted its proposal to the government to be included in an incentive programme, known by its Spanish initials RIGI, that provides legal guarantees and tax breaks, according to a post on X.
In a separate statement, the company said the project known as LLL Oil will span 15 years and involve 1,152 wells that will pump 240,000 barrels of oil per day by 2032. All production would be destined for export, and the company estimates it would reach $6 billion of shipments annually.
The investment would exceed YPF’s US$17.2-billion market value and would require significant capital from banks and other firms likely outside of Argentina. Neither Marin nor the company statement provided details on financing.
If implemented, the project stands to supercharge output from Argentina’s shale region known as the Vaca Muerta in Patagonia, where drilling is already ramping up at a sharp pace. Argentina has the world’s fourth largest shale oil reserves, but production has only jumped in recent years due to decades of policy swings and capital controls.
International explorers such as Exxon Mobil Corp, Equinor ASA and TotalEnergies SA, have opted to divest from Argentina since Milei took office. While foreign investors have largely praised Milei’s policies, multinational companies haven’t spearheaded growth with new investments in his first two years in office.
Argentina’s energy sector has become a bright spot in Milei’s economy, helping to propel overall growth as more traditional sectors such as construction and manufacturing remain below levels seen before his presidency. Increased oil and natural gas production has also pivoted Argentina from a net importer to exporter of energy, improving the government’s balance sheet.
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by Patrick Gillespie, Bloomberg
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