Equinor considers selling Argentina shale assets to YPF

(Bloomberg) – Equinor ASA has discussed selling stakes in Argentine shale oil assets to its joint venture partner, state-run oil company YPF SA, according to a person familiar with the matter.

Equinor has held early-stage talks with YPF, which would have preferential rights in any divestment process, said the person, who asked not to be identified as the discussions are private. Equinor, Norway’s biggest oil company, has started a process to value and assess the assets, said another person close the situation.

Argentine energy publication EconoJournal reported last week that Equinor had begun a process to divest its shale assets.

The market-oriented policies of Argentine President Javier Milei are helping to catalyze growth in the Vaca Muerta shale region. The government has a goal of producing 1 million barrels of crude daily within a few years, more than double current output.

Under Milei’s hand-picked management team, YPF is focusing its efforts on the shale patch while offloading aging, conventional oil fields. The company recently opened a remote shale-operations center at its Buenos Aires headquarters and acquired a majority stake in a shale-gas field from Exxon Mobil Corp. and Qatar Energy for about $300 million.

Nevertheless, the risks associated with doing business in Argentina have led several foreign oil companies to exit the country in recent years, or remain only lightly invested, leaving homegrown drillers to exploit the shale patch.

Equinor owns a 30% stake in the Bandurria Sur area, which lies in YPF’s shale production heartland. YPF owns 40% of Bandurria Sur. The companies also hold 50% each of the Bajo del Toro project, located further north in a less-developed, exploratory region.