Chevron Shale Talk Makes YPF Best Performer: Buenos Aires Mover

YPF SA rose the most among major Argentine stocks on speculation the state-run energy company will sign the first binding partnership to develop shale oil and natural gas since its nationalization a year ago.

The shares gained 3.5 percent to 137.50 pesos in Buenos Aires, the highest closing price since March last year. Argentina’s benchmark index rose 1.4 percent.

YPF, the best performer this month among 15 global peers tracked by Bloomberg, will sign today an accord with Chevron Corp. in a ceremony to be attended by President Cristina Fernandez de Kirchner and Chevron Chairman and Chief Executive Officer John Watson, newspaper El Cronista reported, citing a government official it didn’t identify. Yesterday the government said it will offer energy companies incentives if they invest $1 billion or more over a five-year period.

“The stock is rallying on the Chevron agreement and the government decree,” Carlos Aszpis, an equity strategist at Schweber & Cia. Sociedad de Bolsa SA, said by telephone from Buenos Aires. “There’s been a nice combination of headlines driving the move.”

A definitive deal with Chevron, the world’s second-biggest oil company, would help YPF tap the world’s second-largest shale gas deposit and fourth-largest shale oil reservoir as the country struggles to lift output and pare fuel imports. In a preliminary arrangement, the ventures’s initial investments were estimated at $1.5 billion.

Independence Goal

Watson will travel to Argentina to sign the deal between July 15 and July 16, Jorge Sapag, governor of Neuquen province where the Vaca Muerta shale formation is located, said on June 26. Jim Craig, a spokesman for Chevron, couldn’t immediately be reached by phone for comment today. A YPF official who isn’t authorized to speak publicly said he didn’t have any information on when the agreement will be signed.

Fernandez’s government seized a 51 percent stake in YPF from Spain’s Repsol SA in April 2012 to stem fuel imports that doubled to $9.4 billion in 2011 and are expected to rise to as much as $15 billion this year.

Chevron’s investment will help make Argentina energy independent, Ali Moshiri, Chevron’s head of Latin America, Middle East and Africa, said May 16, after touring the shale formation in southwestern Argentina.

Vaca Muerta, Spanish for dead cow, may hold at least 23 billion barrels of oil equivalent, according to a report by independent auditor Ryder Scott released in February 2012 by YPF.

YPF’s American depositary receipts rose 2.3 percent to $16.27 in New York, the highest since Feb. 20.

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