YPF Moves to Acquire TotalEnergies’ Shale Assets in Argentina

Argentina’s state energy company, YPF, is reportedly finalizing an acquisition of shale assets from French energy giant TotalEnergies. This move comes as YPF seeks to expand its footprint within the Vaca Muerta shale formation, which is recognized as one of the largest shale deposits globally. According to information from Bloomberg, the deal could be valued between $400 million and $500 million.

The assets in question are located in an underdeveloped section of the Vaca Muerta play. TotalEnergies has stakes in two fields there, while YPF has been actively involved in exploring other sections of this significant energy resource. The Vaca Muerta formation is estimated to contain recoverable resources of about 16 billion barrels of oil and 308 trillion cubic feet of natural gas, solidifying its position as the second-largest shale gas deposit in the world.

YPF’s Growing Role in Vaca Muerta

YPF has emerged as the most active developer in the Vaca Muerta region, having drilled over 800 wells between 2015 and 2021. This figure starkly contrasts with the 150 wells drilled by the second most active company in the area, Tecpetrol, during the same period, as reported by data from Enverus. TotalEnergies also drilled 150 wells, positioning it alongside Tecpetrol in terms of activity levels.

Currently, YPF is responsible for approximately 55% of the oil production and 45% of the natural gas output in the Vaca Muerta formation, in collaboration with Tecpetrol, according to Rystad Energy. This substantial involvement highlights YPF’s central role in the region’s energy landscape.

The Argentine government, under President Javier Milei, has emphasized the importance of the Vaca Muerta shale play for attracting foreign investment. Efforts to enhance energy security by increasing domestic production rather than relying on imports are also a priority. There are strong aspirations to position Argentina as a significant energy exporter in the coming years.

As YPF progresses with this acquisition, the implications for both the company and Argentina’s energy sector could be substantial. The deal not only signifies YPF’s commitment to expanding its operations but also reinforces the strategic importance of the Vaca Muerta formation in the global energy market.