(Bloomberg) – Argentina’s biggest oil company, state-run YPF SA, is planning a sweeping asset sale under President Javier Milei to sharpen its focus on shale production and boost its share price.
YPF operations in Argentina's Vaca Muerta shale basin
The plan is part of a broader effort to streamline the company and increase its production and exports, according to a company official who asked not to be identified because they weren’t authorized to discuss the matter publicly.
The assets YPF plans to sell are mainly aging oil fields across Patagonia that are less profitable than the crown jewel of its portfolio, shale patch Vaca Muerta, the official said. It will also look to divest stakes in more than 20 companies if they’re deemed to detract from YPF’s overall value. Those units are in the oil-and-gas, energy and research-and-development sectors. Profitable stakes or ones that help YPF’s equity story would be kept.
The effort is part of Milei’s plan to supercharge YPF’s stock value and help the company finally realize the export potential of Argentina’s rich Vaca Muerta shale formation, which could produce a million barrels of crude a day by 2030 and plenty of natural gas, too.
To that end, YPF will also focus on leading plans with partners to build new crude pipelines and a liquefied natural gas terminal. And it will continue to explore a new shale frontier called Palermo Aike and offshore fields as these may be able to match Vaca Muerta’s potential, the official said.
The official said YPF was looking to Brazil’s oil giant Petrobras and its divestments over the past decade as inspiration. YPF’s New York-traded shares have dropped since it was nationalized in 2012.
Milei said during his election campaign that he would seek to put the company in order and recover its value before selling it back to the private sector, although the path to re-privatization was excluded from signature legislation snaking its way through congress.
Milei has brought in new top managers from the oil and steel empire of Argentine-Italian billionaire Paolo Rocca to execute the strategy. They will face questions from investors in an earnings call March 4.
