Argentina's YPF set to hike investment to over US$5bn in 2023

Argentine state-owned oil and gas giant YPF will invest more than US$5bn in 2023, which would be 22% more than in 2022.

"For 2023, the company's investments will exceed US$5bn, which will allow it to continue with this growth agenda," YPF CEO Pablo González was quoted as saying by state news agency Télam, adding that the firm invested US$4.1bn last year.

The executive said during a meeting between representatives of Argentina's hydrocarbons sector and German chancellor Olaf Scholtz that increasing YPF's investment budget would allow it to maintain the landmark 9% growth in production it achieved last year, the highest annual hike in 25 years.

YPF's investment portfolio includes its Vaca Muerta unconventional assets, its conventional production platform and the modernization of its La Plata, Luján de Cuyo and Plaza Huincul refineries.

The company expects to be able to fully supply its refining platform by mid-2023, at which point it is expected to boost oil exports and seek international buyers. 

Together with Chevron, it is overhauling the existing Estenssoro-Pedrals trans-Andean pipeline (OTA by the Spanish acronym) in a bid to resume oil exports to Chile and access Concepción port on the Pacific Ocean.

Unlocking the pipeline's full potential requires a connection between the heart of the Vaca Muerta unconventional formation in the south of Neuquén province, where most of YPF's oil output is located, to the northern Neuquén town of Puesto Hernández, where the OTA begins. This will require a 150km extension that the company aims to have ready by the end of this year.

Having this new section operating would allow YPF to export over 100,000b/d of oil directly to central-southern Chile, the firm has said.

Beyond its current assets, YPF is also exploring the D-129 formation in the Golfo San Jorge basin, where it expects to find large shale potential. A second exploration plan is being drafted for the southern province of Santa Cruz, which has both conventional and shale potential.

The firm is also exploring long-term infrastructure opportunities, including the potential to build an LNG production facility in the port town of Bahía Blanca in partnership with Petronas, and a US$1.2bn oil pipeline leading to Punta Colorada on the coast of Río Negro province, along with port facilities with capacity to export 360,000b/d of crude oil.

***

YPF and Pampa Energía have concluded the US$250mn overhaul of the Ensenada de Barragán gas-fired power plant in Buenos Aires province.

The works, which turned the plant into an 847MW combined-cycle facility, have added 280MW to its previous capacity of 567MW without increasing its fuel consumption, the companies said.

The companies inked a deal worth US$530mn to buy the plant from state-owned Energía Argentina in 2019, which included a commitment to conduct the overhaul. At the time, the project's cost was estimated at US$180mn.