TotalEnergies sold 45% of its oil and gas blocks in Argentina to YPF at $500 million
TotalEnergies announced on Wednesday that Total Austral, its affiliate company, had agreed to sell 45% of its interest in two unconventional gas and oil blocks to YPF Argentina.
TotalEnergies announced that the deal was valued at $500m. It represents 20% of TotalEnergies' acreage within Argentina's Vaca Muerta shale, which is the second largest unconventional gas reserve in the world.
TotalEnergies, Argentina's biggest private operator, is responsible for about one-quarter of the gas produced in the country.
TotalEnergies senior vice president for exploration and production, Americas, Javier Ravelo said that the company was committed to Argentina, and the sale allowed it to concentrate on developing the core assets in Argentina, including the Fenix offshore Tierra del Fuego gas field, and the Neuquen basin.
YPF stated in a press release that the assets were accompanied by fracking licenses valid until 2051. These licences are crucial to the growth strategy of the Argentinian firm.
The company said that the Rincon La Ceniza assets were well located to feed gas to a future Argentina Liquefied Natural Gas export facility. Meanwhile, the La Escalonada assets contained mainly crude oil and could contribute to a growing northern hub at Vaca Muerta.
TotalEnergies' CEO Patrick Pouyanne stated on a results call held on July 24, that the company has accepted binding offers to purchase its Argentinian shale-oil licence and two assets upstream.
Pouyanne stated that it was logical to sell TotalEnergies’ minority stakes where production costs exceeded the company’s new project ceiling, which is $20 per barrel. This would allow them to invest in their larger projects in Suriname, Brazil and other countries, as a part of its low cost, low emission oil and gas strategy.
Pouyanne, an analyst, told analysts in a recent interview: "We would rather allocate capital to expanding Block 53 in Suriname, and... to the vast portfolio in Brazil with Sepia-2 and Atapu-2 as well as the Lapa Extension, etc."
The assets sold are partly owned by Shell (45%), and the local company Gas y Petroleo de Neuquen ( 10%). Reporting by Gianluca Nostro, Gdansk; Walter Bianchi, Buenos Aires; and America Hernandez, Paris. Kirsten Donovan, Mark Potter and Kirsten Doovan edited the article.
(source: Reuters)
