YPF, the Argentine state-operated energy giant, has acquired two production blocks within the Vaca Muerta geological formation from the French multinational TotalEnergies. The transaction, valued at US$500 million, signifies the European firm’s withdrawal from the shale oil and gas production area in Argentine Patagonia.
Total Austral S.A., a subsidiary of TotalEnergies in Argentina, divested two blocks: La Escalonada and Rincón La Ceniza. Upon the conclusion of the operation, YPF will acquire ownership of a joint venture that holds 45% of the rights to these blocks, in partnership with Shell Argentina, which also holds 45%, and G&P, which holds 10%. Both blocks possess shale exploitation concessions that extend until 2051. YPF has stated that these are “key assets” for its growth strategy in Vaca Muerta.
“La Escalonada is a first-class crude oil producing block that will enable the company to enhance its current production and create synergies to accelerate the development of the Vaca Muerta North Hub,” read the statement. Rincón de La Ceniza, as stated by YPF, is situated in the wet gas window of Vaca Muerta and possesses “strategic potential for the development of the Argentina LNG project.” The acquisition aligns with YPF’s strategy to enhance its asset portfolio and bolster its standing as a leading shale operator globally, according to the company.
During the regular press conference on Friday, presidential spokesman Manuel Adorni stated that the company’s strategy enabled it to capture 60% of the fuel market. The official indicated that hydrocarbon production in the country experienced a year-on-year increase of 16.2%, achieving levels in June that had not been observed in over two decades. “After decades of energy populism, during the first half of the year, Argentina achieved its largest energy trade surplus in the last 35 years, amounting to $3.76 billion,” he noted.
In May of last year, the company declared its intention to exit conventional oil fields, redirecting its efforts entirely towards Vaca Muerta. YPF is encountering challenges in the judicial arena, with a New York court mandating Argentina to transfer its shares of the company to a hedge fund, as a portion of a US$16.1 billion lawsuit settlement. Argentina has lodged an appeal against the order, which was provisionally suspended in the previous month.