YPF and ENAP agree to increase gas and oil production off Magellan Strait

Saturday, June 4th 2016 - 08:57 UTC

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Argentina's YPF and Chile's Enap Sipetrol announced a joint project to expand the production of natural gas and crude from the offshore Magallanes Deposits, (PIAM), to the east of Magellan Strait Reserve. Representatives from Tierra del Fuego province and Magallanes Region, and from the two companies, attended the announcement ceremony.

The project involves an investment of US$ 165 million, and the target is 60% increase in gas production, from the current 2.4 million cubic meters per day to 4 million, and a 25% for crude, from 800 cubic meters per day to 1.000 cubic meters.

“The PIAM project is part of our Strategic Business Plan and involves a significant investment which ratifies ENAP's commitment to continue involvement in sustainable deals, particularly in the year we celebrate the 25th anniversary of our operations in Argentina. ENAP is the main offshore operator of the country and the PIAM project contributes strongly to Argentina's energy provision and a clear example of this kind of integration between the two countries”, said ENAP CEO Marcelo Tokman.

YPF and ENAP subscribed in 1991 the Companies Transitory Union Contract, UTE, with a 50% share each in exploring and exploiting for hydrocarbons in the Magallanes Area. In November 2014, the two oil companies agreed to extend the contract, in equal conditions, 50/50.

Attending the ceremony in Ushuaia were Tierra del Fuego governor Rosana Bertone; Argentine Energy and Mining minister Juan Jose Aranguren; YPF CEO, Miguel Angel Guuierrez; ENAP CEO Marcelo Tokman; ENAP Sipetrol CEO Martin Cittadini and Santa Cruz province Deputy governor Pablo Gonzalez.

Categories: Economy, Energy & Oil, Investments, Argentina, Chile.

Tags: Enap Magallanes, Magellan strait, Marcelo Tokman, YPF Argentina.

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Disclaimer & comment rules

chronic
Now publish your performa on the contemplated investment.

What's the projected ROI?

lol
Jun 04th, 2016 - 01:50 pm 0
Marti Llazo
While the argentos receive massive subsidies for gas and electricity, we forget that the chilenos do this as well. In Chile's Magallanes region, the natural gas prices are heavily subsidised, at nearly 80 percent of the market price, and so they receive the natural gas almost free when compared to production costs. The result is predictable waste: Residences and commercial buildings are constructed with little or no insulation and many people keep their offices and homes at poultry-incubation levels. The more that is wasted, the larger the deficit for the state energy agency, ENAP, which was about US$100 million in the red for just the year 2015. Another factor: Being employees of the state, Chile's ENAP workers are handsomely compensated.
Jun 04th, 2016 - 03:48 pm 0

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