Argentina's YPF Taps Statoil To Fill Investment Gap
Argentina's recently nationalized energy company, YPF SA, is holding talks with Norway's Statoil ASA, a YPF official said Monday, a move that comes as YPF courts investors to help the South American nation develop its potentially huge shale gas resources.
YPF's chief executive Miguel Galuccio is flying to Oslo for talks with Statoil, said the official, who asked to remain unnamed. The official said YPF was "confident" about the meeting, although they declined to give any further details about the agenda.
Getting the Norwegian giant to bear the costs of some exploration and production would represent a coup for YPF, whose shock April expropriation by Argentine President Cristina Kirchner led some to question whether it could still attract prospective investors.
In a bid to allay these fears, Mr. Galuccio recently unveiled an ambitious five-year growth plan that he hopes will lead foreign oil companies to set aside their fears and help YPF develop shale gas reserves believed to be the world's third-largest.
Statoil remained tight-lipped on the talks, neither confirming nor denying that a meeting had, or would take place. However, a spokesman acknowledged that the region may hold resources worth developing.
"It is well-known that Argentina is among the countries that geologically has potential for shale gas," the spokesman said.
"In general, we see globally that there are opportunities where we can come in early in new areas, but we haven't pointed at any specific area that we are evaluating," he added. Statoil, which is majority owned by the Norwegian government, currently has no operations in Argentina.
Argentina's government has placed a great deal of trust in Mr. Galuccio, a former Schlumberger Ltd. executive, and has asked him to boost production at YPF as well as help the country reduce its need for imported energy.
Much of this will depend on YPF's ability to properly exploit the 774 trillion cubic feet of gas and 23 billion barrels of oil equivalent that the U.S. Energy Information Administration estimates lies trapped in the Neuquen basin.
Mr. Galuccio said Friday that the company could complete a deal with Bridas Energy Holdings Ltd. before the end of the year, while an agreement with U.S. oil major Chevron Corp. will likely close in the first quarter of 2013.
Chevron signed a memorandum of understanding with YPF in September to explore for unconventional energy in Argentina.
However, earlier this month, Spanish oil company Repsol SA filed a suit in New York federal court attempting to block Chevron from teaming up with YPF in Argentina due to the government's nationalization of Repsol's controlling stake in YPF earlier this year. Argentina justified its decision to wrest the stake by accusing Repsol of failing to invest and bleeding the company dry with dividends.
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