YPF/Chevron signed an understanding to explore for shale gas and oil in Neuquen
Argentina's recently nationalized oil and gas producer YPF SA and the US Chevron Corporation have signed a memorandum of understanding to explore for unconventional energy in Vaca Muerta, in the Patagonian province of Neuquen.
The news, unveiled by YPF in a statement Friday, comes as YPF Chief Executive Miguel Galuccio seeks funding and international partners to carry out an ambitious exploration and production plan over the next five years.
The memorandum cites plans “to explore unconventional hydrocarbon development opportunities in Vaca Muerta...,” YPF said in the statement. The statement did not include additional details of specific plans. Vaca Muerta, located in the province of Neuquen, is thought to be home to massive shale oil and shale gas resources.
Argentina ranks third in the world, behind China and the US, in potentially recoverable shale-gas reserves, with 774 trillion cubic feet, according to a study last year by the US Energy Information Administration.
Since Argentina's government seized YPF from Spain's Repsol SA earlier this year, Mr. Galuccio has been pushing hard to find the partners and money necessary to exploit those recourses and boost overall production.
“With partners as important as Chevron...I'm sure that this is just the first step in a relationship that will be long and important,” Mr Galuccio said in the statement.
Ali Moshiri, Chevron's president of Latin America and Africa, was similarly upbeat, according to the statement.
“We are satisfied to be accompanying YPF in this new process and the whole [energy] sector will benefit from it,” Mr. Moshiri said.
YPF needs to raise fresh cash to fund a multi billion-dollar investment plan between 2013 and 2017 that aims to reverse years of falling output and reserves. YPF has plans to drill next year 132 shale oil and 14 shale gas wells in Vaca Muerta which will demand over 3 billion dollars.
In a recent presentation, Mr. Galuccio said YPF can invest 24.7 billion dollars from its own pocket through 2017, with investment rising to 40.4 billion if the company is successful in inking joint ventures and obtaining outside financing.
Mr. Galuccio also recently met with executives from Russia's Gazprom to gauge support for joint ventures in Argentina.
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27 comments Feed
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And yes, the Chevron view is definitely more muted than the YPF one.
I doubt anything will come of this “understanding” with Chevron. Why would they throw money at something with no hope of ever getting it back or the fear of being nationalized? Makes no sense and they can wait until CFK is gone the o/g isn't gong anywhere.
Even with TMBOA gone, who in their right mind would trust any future AG government without an escrow account to protect their money?
Chevron are far from stupid or gullible and you would have to be both to commit any money to this fiasco.
I don't think anything will come of it, although I wish it would, as it would ensure my pension!!!!!
I take it that your pension lies with YPF then, otherwise I don't get what you mean?
Shall Argentina seek capability from elsewhere?Experts?
I am not an American, I am a Brit, but I have worked in the oil rig / refinary production business as an engineer.
So, what qualifies YOU to comment on 'yanqui experts' in a derogatory fashion?
Once put a half-litre of oil in somebody's engine? Or, oiled your bike chain?
With oil experts like you no wonder LatAm is well and truly fcuked.
Yuleno is not bad and not a troll, certainly more thoughtful then the others. He just happens to be philosophically dichotomic opposite to what role a government should play in commerce and enterprise.
You do realize Yuleno that Chevron is not coming in on the deal that was given to Repsol(before they were robbed) and that this deal was signed prior to year end and the details will be filed in the 10k with the SEC at calendar year end?
However, that being said, Chevron has been in argentina a long time and worked with ypf since the 90s. The details of the memorandum is to “explore what opportunities exist”. Most business people understand what that means; further talks will develop to discuss contract details. When you take a company like Chevron and a market capitalization of 230 billion U$(YPF=5 billion), they did not get they way by accident and giving away money for nothing. Check the cheat sheets if you get them.
The Arg gov needed a loan of $1.5 B, mostly from Anses, for YPF. I am curious as to whats stopping this from going the the way of Aerolineas..
If YPF does indeed get a new type of financing from Chev, it will strengthen Obama's claim that the industry can exist without subsidies :)
In other words, Chevron have the right to look around to see if there is anything worth investing in, but they have not signed a contract so are under no obligation to drill for oil and gas.
I believe they are probably looking at the prospects now, filing it away for the future, and as soon as Argentina gets a decent government, they'll probably be straight in there, already having done the recce.
From a business point of view it makes sense. Get the preliminaries out of the way, and once you get a decent government, sign a contract, and start drilling immediately, thus cutting the costs.
Sep 15th, 2012 - 06:16 pm
The reason is, Chris, that the Neuquén Government pays my pension, and the NG gets a mayor part of its income from o&g royalties!!!!
then, you are from Neuquén...well
would you tell us about Sabbag Family what you know on them. ?
Got it!
Thanks Simon68. :o)
Sep 16th, 2012 - 06:01 pm
I think you mean the Sapag family, what do you want to know about them?
Is not an “american”.
Conqueror/Captain Poppy said he wouldn't release his name, location and telephone number....because he is afraid of the “crazy” people in the USA.
ONLY A WIMP MAKES SUCH COMMENTS.
Why don't you change your mind and let us know WHO are you?
Oh! No
I am afraid of the “crazy” people in the USA!
Typical response of a british wimp penis!
Conqueror/Captain Poppy said that as an “USA Citizen”...
He ignores the USA is flat broke,
12 USA embassies under attack by the Taliban,
24 USA citizens unemployeed,
46 USA citizens collecting “food stamps” to survive,
26 USA millons living below poverty,
and worst of all AN UNCERTAIN FUTURE ...
Conqueror/Captain Poppy ....you have time now to tell us WHO are you
if ....you feel you worth to read your comments....
Will you tell us who are you?
....I am waiting.....come on...what are your afraid of?
I am happy that I unnerved you guys so much......lol
AND I SHALL NOT STOP!!!!!!!!!!!!!!!!!
hehehehehehehehehehe unnerving is it not.....to wonder?
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