Pemex Sees Benefit in Argentina Shale Partnership, Director SaysPablo Gonzalez
Petroleos Mexicanos, the world’s fifth-largest crude producer, would consider an offer to partner with YPF SA in developing shale projects in Argentina, said a director of the state-run company known as Pemex.
A joint venture with YPF, the company that Argentina expropriated from Spain’s Repsol SA last year, would give Pemex experience in shale oil and gas fields and generate foreign investment for Argentina, Fluvio Ruiz said today at a conference in Buenos Aires.
“We just need to receive an offer and we would decide in a few months if there was an appealing formal offer tendered,” the Pemex board member told the conference.
YPF Chief Executive Officer Miguel Galuccio, seeking partners to help finance projects that would revert declining output, said Sept. 1 he is willing to form a partnership with Pemex to develop deposits in the Vaca Muerta shale formation. While the two companies have held informal talks, Pemex’s board would need a formal offer from YPF to analyze, Ruiz said.
After the nationalized YPF sealed its first shale accord with Chevron Corp. on July 16, Galuccio said Argentina needs more investors like the San Ramon, California-based company to stop a production decline that contributed to the biggest plunge in central reserves since 2002.
YPF American depositary receipts rose 1.8 percent to $17.89 at 12:01 p.m. in New York, the highest level since April 16, 2012, the day President Cristina Fernandez de Kirchner announced the nationalization. Chevron gained 0.4 percent to $121.83, while Repsol added 0.7 percent in Madrid.
Pemex is a minority shareholder in Repsol, which is lobbying against prospective Vaca Muerta partnerships. The Madrid-based producer rejected on June 25 an expropriation compensation offer that included a 47 percent stake in a Vaca Muerta project valued by Argentina at $3.5 billion, as well as $1.5 billion for development, according to a regulatory filing.
Repsol has filed lawsuits in Madrid and New York seeking $10.5 billion in compensation for the seizure.
“We don’t agree with Repsol’s approach to potential YPF deals and regarding this particular potential JV as state-owned companies have their right to discuss their energy policies,” Ruiz said. “I hope they don’t react by opposing once we receive a formal offer from YPF.”
Kristian Rix, a Repsol spokesman in Madrid, declined to comment on Ruiz’s comments regarding Repsol’s approach to potential YPF partnerships.
Repsol filed a request in July to the International Center for Settlement of Investment Disputes, asking the arbitrator to instruct Argentina to abstain from developing strategic YPF assets seized from the Spanish oil producer.