YPF SA is setting apart funds to maintain spending within the fast-growing Vaca Muerta basin even when oil costs fall this yr as administration handpicked by libertarian President Javier Milei appears to construct the state-run firm into a worldwide shale star.
“We’ve ready ourselves,” Chief Government Officer Horacio Marin stated Wednesday throughout an interview in Buenos Aires. “We’ve managed our portfolio very nicely, in order that in a low oil-price atmosphere we don’t want to scale back funding. Our capex doesn’t change whether or not a barrel is price $70 or $55.”
YPF, simply Argentina’s largest oil producer, invested $3.5 billion upstream within the 12 months by September. Marin is eager for spending to remain round that stage as a way to preserve momentum for the corporate’s shale push and, in flip, make good on a promise of massive returns for traders. A contemporary coverage transfer from Milei to spur crude investments ought to assist too.
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“That is the important thing yr,” stated Marin, a 62-year-old oil veteran who’ll lay out YPF’s full technique for 2026 in a Feb. 27 earnings name. “As a result of it’s the ultimate yr of our transition — after which we are able to carry off.”
YPF desires to surpass 200,000 barrels a day of shale oil this yr, Marin stated, up from 170,000 within the third quarter of 2025, after two years of aggressive cost-cutting and divestments. That push included two latest asset gross sales that raised an additional $1 billion for the corporate’s conflict chest and a pending deal to exit pure fuel distributor Metrogas SA.
If the plan to develop income succeeds over the subsequent few years, YPF is concentrating on its first shareholder dividend payouts in a decade. Its New York-traded shares have gained 127% since Milei took workplace and are price about $38. Marin’s goal for the tip of 2027, when Milei finishes his time period, is to succeed in $60.
The Vaca Muerta shale patch in Patagonia is essential to Milei’s plan to stabilize Argentina’s crisis-prone financial system as a result of it might drive enormous vitality commerce surpluses, together with the largest on report final yr. That’s why the federal government stretched out its marquee investor incentives program on Thursday to incorporate shale oil drilling.
Beforehand, the oil ingredient of this system, recognized by its Spanish acronym RIGI, solely included upstream options like separation vegetation, pipelines, in addition to offshore exploration. Increasing it to shale oil wells — the minimal funding in a single venture is $600 million — will spur extra manufacturing to “speed up use of pipeline and export infrastructure and, on the similar time, improve competitiveness,” the federal government stated in a decree.
“Will probably be nice for the trade,” Marin stated from his nook suite overlooking the River Plate estuary.
RIGI’s tax, forex and customs advantages, which drastically enhance the economics of vitality and mining initiatives, could assist to lure US independents seeking to take their shale experience overseas as so-called Tier 1 acreage runs out within the Permian Basin.
Continental Sources Inc., owned by shale billionaire Harold Hamm, lately grew to become the primary of these independents to position a guess on the Vaca Muerta. Marin stated he has chatted loosely — to not do a deal — with Continental and in addition with Devon Vitality Corp., which earlier this month moved to turn into one of many world’s largest shale corporations by agreeing to amass Coterra Vitality Inc.
“Argentina is a logical vacation spot for these corporations to proceed rising,” Marin stated. “Their geologists like Vaca Muerta — we’ve mentioned that informally.”
RIGI may assist towards the backdrop of a possible re-birth of the huge oil trade in Venezuela, the place Marin labored for a number of years.
Whereas Venezuela churns out heavy and bitter crude, versus Argentina’s mild and candy shale, the YPF chief highlighted how additional regional manufacturing accentuates the necessity to hold prices down. “We will’t have spurious prices as a result of that’s precisely what takes you out of the competitors,” Marin stated.
In addition to shale oil, Marin is overseeing Argentina’s signature liquefied fuel export venture, a enterprise with Italy’s Eni SpA and Abu Dhabi Nationwide Oil Co.’s XRG that may ship not less than 12 million tons a yr of LNG, together with loads of related pure fuel liquids.
With XRG now confirmed as a associate — it made the dedication binding final week — the seek for not less than $14 billion in financing is now heating up. By any account, that might be the most important venture finance deal in Argentine historical past. Marin in contrast gathering the money, a piece of which may come from export credit score companies, to a jigsaw puzzle.
“Now we have to see how we’ll put it collectively,” he stated. “There are a number of banks which are providing preliminary tickets which are very costly.”
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