YPF to direct billions towards Vaca Muerta

BUENOS AIRES , June 5, 2017 – YPF is planning to invest between USD 2.5 billion and USD 4 billion per year in Argentina’s unconventional Vaca Muerta Formation after 2019 or 2020, company CEO Ricardo Darré told reporters.

During a recent field trip with members of the media to the Argentine NOC’s operations at Loma Compana, Darré said YPF intends to release a new five-year investment plan later this month.

The plan will reportedly factor in cost improvements of 20% and productivity gains of a further 20%, and not include areas blocked for development by ongoing protests of the Mapuche community.

Cost reductions have been key to YPF’s development plans in the current low-price environment, and the cost of drilling a well in Vaca Muerta has decreased from USD 19 million in 2013 to around USD 8.1 million this year.

YPF operates in 28 areas in the basin, nine of which are in co-operation with other firms. The company says it is working on 13 pilot projects and six development projects this year and the next, and will conduct five pilot and 17 development area operations in 2019.

To help reach its development goals, Darré said YPF will look to the government for assistance in improving transport infrastructure, especially the rail link between Bahía Blanca and the refinery in Plaza Huincul, as well as access to gas pipelines.

YPF will also sign a contract before the end of the month with Bolivian NOC Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) worth USD 25 million to explore a gas block in Bolivia, according to a public notice by the Telam news agency.

The two companies signed a services agreement in January for the same block, Charagua, which holds an estimated 76.5 bcm (2.7 tcf) of natural gas.

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