YPF plans investments of u$s2,800 million for 2020

The figure represents a decrease of 20% compared to the previous year, due to the inconveniences that the state oil company and the sector faced during the past year
Télam Thursday, 16 April 2020

The oil company YPF plans to invest around 2,800 million dollars in 2020, a figure that represents a 20 percent decrease compared to the previous year, due to the inconveniences that the company and the sector faced in 2019.

In addition, the oil company has a maturity schedule for the next twelve months for an estimated amount of 1.5 billion dollars, which it will seek to refinance.

This is part of the budget prepared by the company for this year and presented to the investors by its CEO, Daniel González, through a teleconference.

During the presentation, the executive noted that YPF has "a consistent and realistic plan for 2020" that will allow it to overcome the problems that the oil company faced in 2019 as a result of the macroeconomic situation, the drop in gas prices and sector regulations.

The situation was anticipated by the oil company managers in September, when the need to reduce their activity in 2020 began to be anticipated, in particular, due to the freezing of prices and the financing difficulties imposed by the conjuncture in the country.

Their theory became true after the announcement that YPF will invest around 2.8 billion dollars this year in its operations -700 million less than in 2019-, of which 1.8 billion dollars will be concentrated in three areas of Vaca Muerta: Loma Campana, Amarga Chica and Bandurria Sur.

"We will focus on accelerating shale oil developments from the central core with 101 new wells, a gross oil production of 155 kboed and 11 drilling rigs," Gonzalez told investors.

According to YPF numbers, the production of crude in 2020 will grow 2 percent while the gas output will fall 8 percent.

During contact with investors, González said that "this year we will have a lower level of activity in the 'upstream'", and clarified that the company will "focus on the development of shale oil while taking a 'wait and see' to analyze natural gas projects until this market stabilizes and begins to grow again."

The company's idea is "to be prepared to react quickly when conditions improve and grow soon" in terms of both prices and demand.

In its last quarter of 2019 report presented before the Stock Exchange, YPF stated an operating loss of more than 33,000 million pesos; a reduction in hydrocarbon production of 3 percent.

The approach of new strategic partners for the areas that owns in Vaca Muerta is the key to attract the dollars that Vaca Muerta and YPF need, and that will be the continuity of a strategy already proven with the alliances with Chevron, Exxon, Total, Equinor , Petronas, among other great international players.

The international drop in prices due to the effect of the coronavirus on the global economy also adds complexity to the local panorama, since with a Brent at 45 dollars a barrel - and in a downward trend - it anticipates that "a year of less exploration and investigation," according to González.

However, the company achieved significant improvements in its 'breakeven,' with respect to which -within the possibility of controlling the price of the 'commodity'- a combination of increased productivity stands out and a reduction in the capex that YPF heads in Vaca Muerta.

The oil company also confirmed its commitment to conventional resources, and the investment it is making in secondary and tertiary recovery with the development of 10 polymer injection plants that will allow it to take advantage of mature wells.

"The company developed during 2019 in very difficult circumstances but we have a consistent and realistic plan for 2020," was the final message that the CEO of the oil company transmitted to investors.