Argentina's state-run oil company YPF plans to invest $4B-$5B per year through 2022 to significantly boost oil and gas production, CEO Daniel Gonzalez told Reuters on Friday.
YPF which produced the equivalent of 544,600 barrels of oil a day in the second quarter, expects to increase production by 5%-7% per year, with the largest increase in the Vaca Muerta formation- one of the largest deposits of shale oil and gas in the world- where YPF intends to invest $3.6B on infrastructure over the next five years.
Gonzalez also said that the company hopes to speed up shale oil and gas extraction, with 1,700 wells drilled by 2023.
YPF’s gas production in the second quarter of the year averaged 44 million cubic meters a day, 1.3 percent lower than in the same period in 2017, according to Bloomberg.
“Crude oil is going to grow, I would say twice as fast as natural gas for us in the next five years,” the news agency quoted Gonzalez as saying. “Having said that, crude oil production will be seven times what it is today and shale gas will be four times what it is today in five years. So there will be a significant growth in unconventional (shale) production.”
The 96-year-old company also plans to begin exporting gas to neighbour Chile and investing in offshore exploration in the Argentina’s Gulf of San Jorge. It also said it will double its electricity generation capacity, and that 20 percent of that electricity would come from renewable sources by 2023.
Gonzalez who took as CEO in April 2018 and served as CFO for six years said YPF's plans will allow for a doubling of dividends every year over the next three years. He also played a key role in negotiating joint ventures in Vaca Muerta with oil companies including Shell and Schlumberger,
YPF shares jumped 4.3 percent to 562.35 pesos ($15.20) per unit in afternoon trade on Friday.
YPF is the leading energy company of Argentina, producing 43% of the total oil and gas in the country and supplying 56% of the fuel markets through a network of 1500 gas stations and other assets. Headquartered in Buenos Aires, YPF is leader in the production of unconventional resources.
It is an integrated energy company that generates a large offering consisting of natural gas, electricity, fuels, petrochemicals, lubricants and products for agriculture, among others.
The company was created by Argentina's President Hipólito Yrigoyen and General Enrique Mosconi on 3 June 1922 and was the first entirely state-run oil company in the world.
YPF's creation was followed by the creation of:
ANCAP in Uruguay (1931), YPFB in Bolivia (1936), Pemexin Mexico (1938), ENAP in Chile (1950)
and Petrobras in Brazil (1953).
YPF is listed on the Buenos Aires Stock Exchange and the New York Stock Exchange.