MercoPress. South Atlantic News Agency

YPF unveils five year plan to explore for oil and gas in the Falklands basin

YPF Chief Executive Sebastian Eskenazi

Argentina's YPF, the local unit of Spanish oil major Repsol, said on Tuesday it would explore for oil and natural gas in the Falkland/Malvinas Islands basin as part of a five-year exploration program.

YPF, Argentina's biggest energy company, will spend about 100 million US dollars for the exploration work in the South Atlantic, leading a consortium also involving Argentina's Pan American Energy and Brazil's Petrobras.

“We will invest all the resources necessary to explore the whole of the country and find out its full potential in terms of oil and natural gas reserves” Chief Executive Sebastian Eskenazi said in a presentation. “We’re going to define the map of remaining exploration opportunities in Argentina”, he added.

He did not put a figure on the planned investment in exploration up through 2015 but he said the firm had already earmarked some 1.61 billion USD for investment on refining and logistics over the next three years.

Argentina claims sovereignty over the British-controlled Falkland Islands and the two countries fought a brief war in the remote archipelago in 1982, following Argentina’s invasion of the Islands.

“This is a frontier exploration project, with high potential as well as high geological risk in an area with water depths of 500 meters” a company statement said. It said the exploration work would take place some 289 kilometres from the coast of Patagonia, but gave no further details.

Earlier this year, Britain and Argentina lodged claim to a large swath of South Atlantic seabed around the remote islands, setting the stage for a battle for control of potentially rich oil and gas reserves.

YPF plans also involve mapping out the 250 unassigned exploration blocks remaining in Argentina. Of those, 135 are offshore. While those investment plans haven't been defined in the free blocks, each site will be mapped out using two-dimensional or three-dimensional imaging or through exploratory drilling, as appropriate, said an YPF spokesperson. YPF is also going to focus on increasing its gas-recovery rates.

“Our view is to increase the recovery factor from the current 20% to 25% in 10 years...notably increasing the country's reserves,” Eskenazi said in the release.

In November, YPF said that it had added 109 million barrels of oil equivalent, or BOE, to its proven oil and gas reserves in the first nine months of 2009. Over the three years running up until late 2009, YPF incorporated about 300 million BOE to its proven reserves, a company spokesman said in November.