MercoPress, en Español

Montevideo, December 1st 2021 - 14:59 UTC

 

 

YPF hikes fuel prices 7% to help finance an ambitious investment plan to boost crude production

Thursday, March 18th 2021 - 08:53 UTC
Full article
YPF said the increase took effect at the start of the day, adding that this was the first of three increases for the rest of this year that will total 18% YPF said the increase took effect at the start of the day, adding that this was the first of three increases for the rest of this year that will total 18%

YPF, the biggest oil producer in Argentina, said on March 16 that it hiked diesel and gasoline pump prices by 7%, helping to finance a US$2.7 billion investment plan to boost crude output.

The state-backed company said the increase took effect at the start of the day, adding that this was the first of three increases for the rest of this year that will total 18%, according to a brief statement.

“The planned increases will make it possible to finance, among other things, an ambitious investment plan for US$2.7 billion this year,” the company said.

YPF relies on the revenue from its petroleum product sales — it has a 55% market share for diesel and gasoline — to finance its investments because of tight access to credit stemming from the country's low creditworthiness. The local financial market is also too small to raise all the financing it needs for the investment program.

The investment plan is 70% more than in 2020 and is designed to return oil production to growth after a more than 9% slump last year, as a nearly eight-month lockdown of the economy for the COVID-19 pandemic slashed demand and forced the company to shut in wells as it could not sell all of the production. A plunge in oil prices also discouraged activity, which was further constrained by measures to keep workers safe.

The slump, however, hit bottom in the second quarter of 2020, and production has been recovering since then and should allow output to stabilize in the first half of 2021 before resuming growth in the second half, YPF CEO Sergio Affronti said March 5 in a conference call with investors.

He said he expects oil production to rise 5% in the second half of this year compared with the year-earlier period, taking the full-year average output of oil to 208,000 b/d in 2021, up from an average of 206,800 b/d in 2020.

Of the investment, 80% will go into the upstream sector, with US$1.5 billion in oil — and much of that in Vaca Muerta, the country's biggest shale play.

Categories: Economy, Energy & Oil, Argentina.

Top Comments

Disclaimer & comment rules

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!