YPF Makes Argentina’s Largest Oil Discovery in Two Decades
YPF SA (YPF), Argentina’s largest company by market value, said it’s discovered the equivalent of about 150 million barrels of shale oil at a field in southern Patagonia, the country’s largest discovery in two decades.
YPF, in which Madrid-based Repsol YPF SA (REP) is the controlling shareholder, made the find in the Loma La Lata field, YPF Chief Executive Officer Sebastian Eskenazi said today in a televised speech from Neuquen province. YPF found 4.5 trillion cubic feet of unconventional natural gas in the same area in December.
The Buenos Aires-based company will invest $270 million this year to develop the shale oil project, which will boost Argentina’s total crude reserves by 6 percent and YPF’s by 27 percent, President Cristina Fernandez de Kirchner also said today in a televised speech after Eskenazi’s announcement. YPF said it plans to drill 17 new wells in the Loma La Lata area.
Eskenazi is seeking to limit YPF’s production declines as the country’s oil fields mature. YPF produces more than 50 percent of Argentina’s crude. The company, in which the Eskenazi family owns 25 percent, last year had a 100 percent annual oil reserve-replacement ratio for the first time in 13 years.
So-called unconventional shale formations are more costly than traditional wells as they extract oil or gas trapped in shale rocks.
Vaca Muerta
Five shale oil wells are currently producing from the Vaca Muerta formation in the Loma La Lata area, YPF said. The wells produce between 200 and 560 barrels of oil equivalent per day, the statement said.
The Eskenazi family’s closely-held Petersen Group last week boosted its stake in YPF to 25 percent from about 15 percent by paying Repsol $1.3 billion for the additional stake.
YPF American depositary receipts rose $1.96, or 4.50 percent, to close at 45.56 in New York Stock Exchange composite trading at 4:15 p.m.
To contact the reporter on this story: Rodrigo Orihuela in Buenos Aires at rorihuela@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net.
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