Argentina’s biggest oil and gas driller, state-run YPF SA, is in talks with global supermajors to become equity partners in its LNG export project as the company’s chief executive officer hinted that Malaysia’s Petronas may exit.
“Petronas has to decide at the end of December if to continue or not,” CEO Horacio Marín said on an earnings call Friday. “We are continuing to discuss with supermajors to enter as equity.”
An exit by Petronas, which started the LNG venture two years ago, would be a blow since it has expertise in the provision of floating liquefaction vessels.
YPF is ramping up production in heralded shale patch Vaca Muerta, where its capability to invest depends heavily on fuel prices that it charges at the pump. In the third quarter, Argentine drivers paid slightly more than global reference prices — a rare turnaround spurred by the government of President Javier Milei, which ended the market-meddling of previous administrations designed to keep fuel cheap.
“These are remarkable results after a continuous conviction to follow international parities,” Max Westen, head of strategy and business development, said on the call.
Meanwhile, Marin has been meeting potential buyers of LNG in Asia and Europe. On the call, he said YPF has reached more than a dozen agreements with suitors to explore offtake contracts and plans to have another soon with India for a “big number.”
Another key to boosting shale exports is the construction of a US$2.5-billion cross-country oil pipeline. YPF — which will have an equity stake of up to 40 percent in the project, called Vaca Muerta Sur — is leading drillers’ search for funding, and international banks have signed letters of intent to lend US$1.5 billion, said Chief Financial Officer Federico Barroetavena.
“We believe that we have strong interest to finance this deal, but it will be a process that takes some time,” Barroetavena said.
by Jonathan Gilbert, Bloomberg
Comments