MercoPress. South Atlantic News Agency

YPF CEO Galuccio travels to Norway to discuss partnership with Statoil

Statoil, “an admirable ownership and governance model” said Galuccio

Argentina’ nationalized oil and gas corporation YPF is said to be in talks with Norway’s Statoil about a possible partnership as part of its 37 billion dollars drive to develop Argentina’s energy reserves. It is close to signing deals with US oil giant Chevron as well as Bridas Corp, the Chinese-Argentine joint venture, the Financial Times reported on Sunday.

Following May‘s seizure of Argentina’s oil giant from Spanish oil major Repsol, any kind of deal would spell good news for President Cristina Fernández government as it seeks out new partners and investment.

YPF says it needs to invest over 30 billion dollars in the next five years, 4.5 billion of which is to come from strategic partners, to help pay to develop Argentina’s huge shale oil and gas resources.

According to a report from the US Geology Service Argentina’s shale gas reserves are the third-largest in the world after the US and China, but requires foreign capital and technology in order to facilitate production and decrease its energy import bill. However is locked out of global credit markets, is considered a pariah by many investors, and faces lawsuits due to the Repsol nationalization.

“I’m not just talking to Statoil about the Norwegian company’s admirable ownership and governance model,” Miguel Galuccio, YPF chairman and chief executive, told the Financial Times after a London investor conference.

Talking to foreign media for the first time, Galuccio said he would travel to Oslo on Monday to meet with Statoil. He added that he was “confident” about completing deals with Chevron and Bridas by yearend.

Bridas is owned by billionaire Carlos Bulgheroni. The YPF investment would be made through its British Virgin Islands’ registered subsidiary, Bridas Corp, which is half-owned by the China National Offshore Oil Corp (CNOOC).

Galuccio said Chevron and Bridas would develop two separate pilot fields, and each would require an initial investment of up to 2 billion dollars. These upfront investments would be used “to carry” YPF through until the fields produced sufficient gas whereupon YPF could market the gas to fund its share. Full development of each field would cost around 10 billion, he said.

“I am very confident about Bridas, and I am confident too about Chevron. But Chevron is a corporation, so the proposal has to go to the board first,” the chairman said.

The Norwegian state-controlled company has a lot of offshore oil expertise in the North Sea as well as shale interests in the US and Australia.

However, lawsuits and Argentina’s difficult relations with international investors have made raising money an uphill climb for the government.