Argentina’s YPF SA Announces Major Asset Sale to Focus on Shale & Boost Market Value
Argentina’s leading oil firm, YPF SA, controlled by the government, is planning a significant divestiture initiative under President Javier Milei’s administration, aiming to concentrate on shale exploration to boost its market valuation.
This strategy is part of a larger scheme to optimize the corporation’s operations, boosting both production and export capabilities, as stated by a company spokesperson.
YPF intends to offload primarily older oil fields located throughout Patagonia, which are not as lucrative as its flagship asset, the Vaca Muerta shale region, according to the spokesperson. The company is also considering the sale of shares in over 20 businesses that are perceived to detract from YPF’s overall value. These entities span the oil-and-gas, energy, and research-and-development sectors. However, stakes that are profitable or contribute positively to YPF’s financial narrative will be retained.
These actions align with Milei’s ambition to elevate YPF’s stock performance and unlock the export potential of the Vaca Muerta shale reserve, anticipated to yield a million barrels of crude daily by 2030, alongside significant natural gas production.
Furthermore, YPF is set to lead initiatives alongside partners to construct new crude oil pipelines and a liquefied natural gas facility. It will also pursue exploration in the new shale region of Palermo Aike and offshore areas, which could rival Vaca Muerta’s output potential, the spokesperson added.
YPF is drawing inspiration from Brazil’s Petrobras and its asset sales over the past decade. YPF’s shares listed in New York have seen a decline since its nationalization in 2012.
During his campaign, Milei committed to restructuring the company and restoring its value before potentially privatizing it again, although this re-privatization plan has been omitted from key legislation currently making its way through congress.
Milei has appointed new senior executives from Paolo Rocca’s oil and steel conglomerate to implement this strategy. These executives are slated to address investor queries in an earnings call on March 4.