Exxon Mobil Corp. (XOM:US) and Apache Corp. (APA:US) will hold talks with YPF SA (YPFD) next month as the Argentine company nationalized in April seeks partners to step up shale oil development, said a YPF official briefed on the matter.
YPF Chief Executive Officer Miguel Galuccio will meet with Exxon and Apache executives during a conference in Houston on Sept. 18-21, said the official, who asked not to be named, citing company policy. Exxon, which is already exploring for unconventional oil and natural gas with YPF in Argentina, doesn’t comment on private meetings, said Patrick McGinn, an Exxon spokesman. John Roper, an Apache spokesman, declined to comment.
Galuccio, who met with Chevron Corp. (CVX:US) executives in Buenos Aires on Aug. 24, is scheduled to unveil today a model for three types of partnerships to tap the Vaca Muerta shale formation, a Connecticut-size area in southern Argentina that contains at least 23 billion barrels. Contracts will be for financial and strategic partners and operators, Galuccio said Aug. 23.
“September will be the month in which YPF will show its capacity to attract investors,” Francisco Perez, the governor of Mendoza province, said in an interview in Buenos Aires.
Perez and Neuquen Governor Jorge Sapag said they will accompany Galuccio to Houston. The two provinces own YPF shares.
The chief executive, appointed after President Cristina Fernandez de Kirchner seized control of YPF from Spain’s Repsol SA in April, may also travel to China later next month to meet with representatives of CNOOC Ltd. (883) and China Petroleum & Chemical Corp. (600028), the YPF official said.
‘Fraught with Peril’
Galuccio described Vaca Muerta earlier this month as the “tip of the iceberg” for YPF’s projects. The company, based in Buenos Aires, has drilled 45 wells at the shale development. Fernandez seized YPF on the grounds that Madrid-based Repsol under-invested since it acquired the company in 1999.
YPF, Argentina’s biggest energy company, approved this month the sale of as much as 5 billion pesos ($758 million) of bonds. The company is seeking funds to invest $7 billion in 2013 as it plans to double exploration in five years and boost refining, Galuccio said June 5.
Galuccio is scheduled to disclose at 12 p.m. Buenos Aires time his proposals for attracting investors to develop Vaca Muerta as part of a more than 1,000-page business plan.
Vaca Muerta is often considered to have “the greatest potential as an oil shale outside of North America,” Roger Plank, chief corporate officer at Houston-based Apache, said at an Aug. 15 energy conference. Having operations in Argentina makes sense even as the country is “fraught with peril,” he said.
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