YPF CEO: LNG, oil exports after 15 years and the potential of Vaca Muerta’s “little brother”

From New York, USA – Special Envoy. As happens in these cases, there was a countdown, shouting and hammering. So is the “closing bellat the New York Stock Exchange, the Wall Street stock exchange which is the world’s largest stock exchange, in the imposing building on Broad Street, south of Manhattan. There, on a cold March noon with sleet forecast, YPF celebrated 30 years of listing yesterday. From the balcony overlooking the operating theatre, where traders in blue overalls closed the last operations before the weekend, hailed Pablo Gonzalez, President of the company; its CEO, Paul Julianoother directors of the oil company, and some guests, such as the Secretary of Energy, Flavia Royonand the Ambassador to the United States, Jorge Arguerello.

A few minutes before, the two and the CFO Alexander Lew, They made a presentation of more than an hour in front of bankers, investors and analysts. There they showed the details of the record results of the 2022 balance sheet, which they presented on Thursday, and which has Vaca Muerta as central director. They also announced the strategy for the coming years, which includes an investment of $5 trillion just for 2023.

Later, González and Iuliano spoke with a group of journalists, including GlobeLiveMediaon the bill to boost LNG, on what the increases in fuels will be in the rest of the year, on the distribution of dividends they plan for the shareholders of the company – what the minister announced Sergio Massa, via videoconference from Buenos Aires – and also from Palermo Aike, the new depot shale who could be a potential “little brother” of Vaca Muerta.

“In 2022, there were problems. They are there and we have to solve them, nobody denies them. Despite the situation and the macro, YPF made progress and generated a profit of 2,200 million dollars. And it had 47% annual growth for crude oil and the same for gas. We reduced the debt and grew despite the problems,” González pointed out when asked how a company with good numbers grows in a very complicated context, with high inflation and devaluation. The same had been consulted by analysts a few minutes before.

“We promise achievable results and that’s what ultimately makes us credible. That’s why shareholders support us,” added Iuliano.

Regarding the LNG bill, YPF hopes that it will be sent in the next few days from the Economy to Congress for processing. It includes the availability of foreign currency for companies investing in the project that will seek to transport Vaca Muerta gas to port areas, in Bahía Blanca, where a ship will liquefy it for export. Later, in association with the Malaysian Petronas and within the framework of the complete project, a factory would be built to industrialize this process which would cost approximately 4,000 million dollars.

“LNG must be a state policy, like hydrogen. Like him off the coast that Iguacel (Javier, former energy minister of the Macri government) started and we continued until he was stopped by Montenegro, the mayor of Mar del Plata, who is of the same political conviction as ‘Iguacel. The project must ensure budgetary stability for a long period, and this must be established by Congress,” González explained.

“The question of the currency is like that, but it is a project that is not for now. If all goes well, it will only be exported in about four years. You don’t have to think about dollars today, but about what can be generated in the future,” the company president said.

Palermo Aike He is a kind of younger brother of Vaca Muerta. Or at least that’s what YPF believes according to the feasibility studies they conduct.

It is a deposit that is in the province of Santa Cruz, it is also hydrocarbons shale and Massa assured yesterday that it has a potential of a third of Vaca Muerta and a horizon of generating up to 10,000 million barrels of oil equivalent. “In four years, we can exceed one million barrels per day and 30% more than gas than today,” explained the minister.

During the NYSE presentation, YPF officials confirmed that partners are being sought to develop the project shale santacruceno.

“We are going to use the Vaca Muerta learning curve. There are a lot of expectations: it is a light oil, which we are already testing in vertical wells and which has the temporary advantage of having infrastructures to quickly reach export ports. There is spare capacity in the southern transportation systems. This is an opportunity to be seized if well productivity accompanies. We will start drilling before the end of the year, and then we will test the productivity for three to six months. There we will start thinking about the valuation of the deposit. It is a different alternative and a value that we can add to the country, “assured Iuliano. There are blocks of YPF, from private oil companies and also from the province.

Starting this year, YPF will export oil again, which the company had not done since 2007. It will reach a refinery in Chile via the Transandino Pipeline (Otasa) with a potential of 110,000 barrels per day from September (30,000 barrels since May) and at a similar price internationally.

This year, to increase its production, the company plans to take on debt on the local market, as it has been doing for several years. It will be about $2,000 million.

According to YPF leaders, the fuel price strategy will seek to follow inflation as closely as possible, even in this 2023 election. late on import parity (import price). We only import a small part of the fuel we sell,” Iuliano said.

“Will this bullish strategy continue to be monthly?”, consulted GlobeLiveMedia. “Yes, that’s what we are trying to do. We will adjust according to the evolution of inflation. We know that we are in an election year and that it has an impact, but that is the strategy “said the CEO and assured that they have not yet been summoned by the Ministry of Economy to discuss further increases.

Regarding the fact that the company plans to distribute dividends with this year’s income, Iuliano confirmed that a reserve of 100 million dollars has been set aside for this purpose. That doesn’t seem like much for a company that in 2022 had a profit of $2.2 billion, but it’s the first time it’s done so since 2019.

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