June 20, 2013
YPF, Chevron sign cooperation accord
Argentine energy company YPF and Chevron Corp signed an accord yesterday to consider jointly exploring for shale oil and natural gas in Neuquén province’s Vaca Muerta field.
Argentina’s left-leaning government seized a controlling stake in YPF, the country’s No. 1 energy company, from Repsol in May and the Spanish firm has vowed to take legal action against companies that invest in YPF.
Repsol reacted swiftly to yesterday’s accord with US-based Chevron. The possible partnership is good news for YPF as it seeks deep-pocketed partners to help fund an ambitious five-year investment plan aimed at boosting production.
“We’re going to take legal action against Chevron. Our legal department is studying the memorandum of understanding,” a Repsol spokesman in Madrid told Reuters.
YPF and Chevron confirmed the signing of a memorandum of understanding but declined to comment on the legal threat.
President Cristina Fernández de Kirchner nationalized YPF on the grounds that Repsol had not invested enough to sustain oil and gas production at a time when demand was booming. Repsol denies this and has vowed to fight the expropriation, for which it has not been compensated.
Under new chief executive Miguel Galuccio, YPF has unveiled a US$37.2 billion investment plan through 2017 aimed at boosting oil and natural gas output by almost a third. About US$4.5 billion would be contributed by business partners.
A US Department of Energy report shows Argentina holds more natural gas trapped in shale rock than in all of Europe — a 774-trillion-cubic-feet bounty that could transform the outlook for Western Hemisphere supply.