Oil prices fell below $50…
Oil prices spiked on Wednesday…
The president of Argentina’s state-owned YPF, Miguel Angel Gutiérrez, confirmed on 27 June that the oil company will continue its strong presence in the energy-rich province of Río Negro.
According to the Argentine press, Gutiérrez assured Río Negro Gov. Alberto Weretilneck that YPF plans to maintain its investment this year for the province. Of particular importance is the Estación Fernández Oro deposit, which produces some 50 percent of natural gas site for Río Negro. YPF in May 2015 planned to invest at least US$1.0 billion for the exploration and development of up to 100 wells at Estación Fernández Oro.
Nevertheless, Gutiérrez reiterated YPF’s plans to sell six blocks in Río Negro in order to focus on more profitable assets.
An YPF spokesman explained to Platts on 24 June that the plan is to offer the sites to thirty small and medium-sized companies with operations in Argentina, and complete the sales by July.
"These are blocks that YPF can't develop as efficiently as it would like because of the cost structure," the company’s representative said. "We believe that a smaller-sized company can achieve better results."
Related: $13 Billion Oilfield Services Merger Set To Move Forward
The blocks account for around 1 percent of the company's production, which in April was averaging 231,000 barrels per day of oil and 38.2 million cubic meters per day of natural gas, based on data from industry group Argentine Oil and Gas Institute (IAPG).
YPF has a minority stake in three of the blocks and total control of the other three, but the company has been forced to cut costs due to the low price of oil and a weak Argentine economy hurting domestic sales. Thus, YPF has opted to sideline rigs and cut its capital expenditures plan by 20 percent to 25 percent for 2016.
According to IAPG, YPF is Argentina’s biggest producer of oil and gas, but the company is anticipating that spending cuts will lead to flat output this year compared to 2015.
By Erwin Cifuentes for Oilprice.com
More Top Reads From Oilprice.com:
Erwin Cifuentes is a Contributing Editor for Southern Pulse Info where he focuses on politics, economics and security issues in Latin America and the Caribbean.…