Argentina's YPF to divest offshore exploration projects, CEO says

Argentina's energy company YPF wants to speed up a divestiture plan that includes selling controlling stakes in offshore exploration projects in Argentina and Uruguay, reducing its presence in mature fields and later offering a gas distribution company for sale, Chief Executive Officer Horacio Marin said.

YPF has exploration rights in seven offshore areas, six off Argentina's coast and one in Uruguay.

However, as the company ramps up oil and gas production in Argentina's most prolific region, the Vaca Muerta formation, its divestiture's goal is to streamline the state-controlled firm to focus on large developments, particularly a massive liquefied natural gas project, with the goal of starting the country's first LNG exports in 2027.

YPF is in talks with a foreign oil major company to sell a portion of its stake in an exploration block in Uruguay, and could offer that and other offshore interests through a bidding round, Marin said. YPF would keep smaller stakes, he added.

The executive also said that a final investment decision on the first floating LNG facility to be installed in Argentina must be made by June as part of the LNG project's first phase, which intends to install six million tonnes per year of LNG output capacity through up to two production vessels.

YPF aims to keep a stake of between 25 per cent and 30 per cent in the whole LNG project, which has been planned through three stages for total capacity of 30 million tonnes per year, and could have oil energy major Shell as one of its main partners.

The company cut $405 million in downstream costs last year, and plan additional cuts of $512 million through 2026, Marin said. YPF's profit last year rose to $2.39 billion from a $1.28 billion loss the previous year.

The company plans to invest some $5 billion this year, in line with 2024 figures.

(Reporting by Marianna Parraga and Eliana Raszewski; Editing by Chizu Nomiyama)