YPF SA is setting apart funds to maintain spending within the fast-growing Vaca Muerta basin even when oil costs fall this yr as administration handpicked by libertarian President Javier Milei seems to construct the state-run firm into a world shale star.
“We’ve ready ourselves,” Chief Govt Officer Horacio Marin stated Wednesday throughout an interview in Buenos Aires. “We’ve managed our portfolio very effectively, in order that in a low oil-price surroundings we don’t want to scale back funding. Our capex doesn’t change whether or not a barrel is value $70 or $55.”
YPF, simply Argentina’s largest oil producer, invested $3.5 billion upstream within the 12 months by September. Marin is eager for spending to remain round that degree as a way to preserve momentum for the corporate’s shale push and, in flip, make good on a promise of massive returns for buyers. A recent coverage transfer from Milei to spur crude investments ought to assist too.
“That is the important thing yr,” stated Marin, a 62-year-old oil veteran who’ll lay out YPF’s full technique for 2026 in a Feb. 27 earnings name. “As a result of it’s the ultimate yr of our transition — after which we will elevate off.”
YPF desires to surpass 200,000 barrels a day of shale oil this yr, Marin stated, up from 170,000 within the third quarter of 2025, after two years of aggressive cost-cutting and divestments. That push included two current asset gross sales that raised an additional $1 billion for the corporate’s conflict chest and a pending deal to exit pure fuel distributor Metrogas SA.
If the plan to develop earnings succeeds over the following few years, YPF is focusing on its first shareholder dividend payouts in a decade. Its New York-traded shares have gained 127% since Milei took workplace and are value about $38. Marin’s goal for the top of 2027, when Milei finishes his time period, is to succeed in $60.
The Vaca Muerta shale patch in Patagonia is vital to Milei’s plan to stabilize Argentina’s crisis-prone economic system as a result of it could actually drive enormous vitality commerce surpluses, together with the largest on file final yr. That’s why the federal government stretched out its marquee investor incentives program on Thursday to incorporate shale oil drilling.
Beforehand, the oil ingredient of this system, identified by its Spanish acronym RIGI, solely included upstream options like separation crops, pipelines, in addition to offshore exploration. Increasing it to shale oil wells — the minimal funding in a single challenge is $600 million — will spur extra manufacturing to “speed up use of pipeline and export infrastructure and, on the similar time, improve competitiveness,” the federal government stated in a decree.
“Will probably be nice for the trade,” Marin stated from his nook suite overlooking the River Plate estuary.
RIGI’s tax, forex and customs advantages, which significantly enhance the economics of vitality and mining tasks, might assist to lure US independents seeking to take their shale experience overseas as so-called Tier 1 acreage runs out within the Permian Basin.
Continental Assets Inc., owned by shale billionaire Harold Hamm, just lately grew to become the primary of these independents to put a guess on the Vaca Muerta. Marin stated he has chatted loosely — to not do a deal — with Continental and likewise with Devon Vitality Corp., which earlier this month moved to change into one of many world’s largest shale corporations by agreeing to accumulate Coterra Vitality Inc.
“Argentina is a logical vacation spot for these corporations to proceed rising,” Marin stated. “Their geologists like Vaca Muerta — we’ve mentioned that informally.”
RIGI may assist in opposition to the backdrop of a possible re-birth of the huge oil trade in Venezuela, the place Marin labored for a number of years.
Whereas Venezuela churns out heavy and bitter crude, versus Argentina’s mild and candy shale, the YPF chief highlighted how additional regional manufacturing accentuates the necessity to maintain prices down. “We will’t have spurious prices as a result of that’s precisely what takes you out of the competitors,” Marin stated.
In addition to shale oil, Marin is overseeing Argentina’s signature liquefied fuel export challenge, a enterprise with Italy’s Eni SpA and Abu Dhabi Nationwide Oil Co.’s XRG that may ship not less than 12 million tons a yr of LNG, together with loads of related pure fuel liquids.
With XRG now confirmed as a companion — it made the dedication binding final week — the seek for not less than $14 billion in financing is now heating up. By any account, that might be the largest challenge finance deal in Argentine historical past. Marin in contrast gathering the money, a bit of which might come from export credit score businesses, to a jigsaw puzzle.
“We’ve to see how we’ll put it collectively,” he stated. “There are a number of banks which might be providing preliminary tickets which might be very costly.”
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