Argentina's YPF Seeks to Participate in Venezuela Offshore Gas Project

CARACAS - Argentine energy company YPF SA is in talks to participate in Venezuela's Deltana offshore natural gas project and is looking to purchase gas to meet domestic needs, officials from both countries' state energy companies said Friday.

Despite boasting large reserves, Venezuela's gas projects have been long delayed and the leftist government has resorted to importing gas from neighboring Colombia to meet its own power needs. But Venezuelan Oil Minister Rafael Ramirez says the OPEC nation expects three major gas projects to come online over the next several months, which will allow for exports as early as next year.

YPF would join U.S. oil major Chevron Corp. (CVX), which has licenses in two blocs of the Deltana shelf, a large off-shore area that lies off of Venezuela's eastern coast, close to its maritime border with natural gas-rich Trinidad and Tobago.

"Deltana's development will need a buyer and Argentina is a buyer," YPF Chief Executive Miguel Galuccio told reporters at the headquarters of Petroleos de Venezuela SA, or PdVSA, in Caracas.

Mr. Galuccio said it was too early to say what percentage participation his company would take in the project and declined to put a timeline on when deals could materialize into action.

Argentina imports between 80 and 100 cargoes of liquefied natural gas every year to feed a deficit of around 230 million cubic meters of gas daily, Mr. Galuccio said, adding that demand rises substantially during winter months.

He made his comments following a meeting with Mr. Ramirez, where both parties signed a memorandum of understanding to evaluate partnerships in each country's energy sector.

Mr. Ramirez called it "a first step for investment in both countries" as they look at financing options as well as opportunities for joint production at mature oil fields and refining.

Like Venezuela, which is looking to advance development of its massive Orinoco heavy oil belt, Argentina, too, aims to move forward with exploiting shale oil and gas reserves located in its Vaca Muerta formation.

Mr. Galuccio said there was a possibility of inviting PdVSA to work at Vaca Muerta. "Of course the participation of Venezuela interests us a lot. There are a lot of similarities between what PdVSA is doing in the [Orinoco] belt" and YPF's operations in Argentina, he explained.


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