YPF Chiefs Raise Output Outlook as Vaca Muerta Begins to Deliver in Argentina
YPF SA will produce more oil and gas than originally planned over the next five years as shale output from the Vaca Muerta formation picks up, according to the Argentine producer’s top two executives. Average growth through 2023 will be as much as 7 percent a year, Chief Executive Officer Daniel Gonzalez and Chairman Miguel Angel Gutierrez said in a telephone interview from New York. That’s up from 5 percent forecast last year. While YPF has been suffering from declining output at mature conventional fields, production will start to bounce back in 2019, and substantial growth will come later as Vaca Muerta accounts for an increasing share of the company’s production, Gonzalez said. The state-run company produced the equivalent of 544,600 barrels of oil a day in the second quarter, with about 10 percent coming from shale fields. Plans for Vaca Muerta, the nascent Patagonian shale play that’s Argentina’s answer to the Permian Basin, include moving test ventures with Schlumberger Ltd. and Malaysia’s Petroliam Nasional Bhd to full production soon. The executives are scheduled to make a presentation to investors at the New York Stock Exchange at 12:30 p.m. local time. Other highlights from the interview: Shale growth to be led by oil because of the rise in prices, with production climbing sevenfold from current levels. Shale gas will grow at a slower rate due to limited demand in Argentina. YPF to plan with other companies for a liquefaction plant on the Atlantic coast to export natural gas when there are seasonal surpluses. Will invest $1.4 billion in upgrading refineries. Profit margins in fuel-sales business will keep improving. Could bring on another partner for power generation unit YPF Luz. Maintains targets for Ebitda growth of 10 percent a year, and debt ratio of 1.5 times Ebitda.