Argentina’s state-run oil company YPF SAYPF 0.20% said Wednesday it plans to invest more than $30 billion over the next five years to boost production.
YPF, which is already Argentina’s leading energy company, aims to increase oil and gas output by 5% annually through 2022 to 700,000 barrels of oil equivalent a day. The company plans to focus on conventional output by drilling more than 1,600 wells.
YPF will also invest in unconventional energy in the Vaca Muerta, or so-called “Dead Cow” basin, which is one of the world’s leading shale oil and gas fields. YPF aims to raise unconventional output by 150%. By 2022, shale oil and tight gas will account for half of the country’s total production, YPF said in a statement.
YPF’s announcement comes after President Mauricio Macri’s ruling coalition won a sweeping nationwide victory in midterm congressional elections Sunday. The coalition gained seats in both houses of Congress and won broader backing from voters than any other party has since 1985.
Foreign energy companies and other investors had been watching the election to see if voters would confirm support for Mr. Macri’s pro-business economic policies. Macri administration officials, meanwhile, had hoped that a strong showing would encourage more companies to invest in Argentina.
Some firms, such as Eco-Stim Energy Solutions , Inc., a Houston-based oil-field services company that works with YPF, expect to increase investment and say Argentina is on track to reduce its reliance on imported energy.
“EcoStim has been a firm believer in the development of the Vaca Muerta,” said Alexander Nickolatos, Eco-Stim’s chief financial officer. “It is refreshing to see the increased activity levels among multiple operators in the country.”
Vaca Muerta is considered the crown jewel of unconventional oil-and-gas outside North America, containing 27 billion barrels of technically recoverable oil and 802 trillion cubic feet of gas, according to the U.S. Energy Information Administration.
“YPF will also focus on exploration with the goal of increasing reserves by 50%,” the company said.
Source: www.wsj.com
