Following Shell’s withdrawal from the project, YPF is negotiating with other supermajors, reportedly including Saudi Aramco and Chevron, to expand LNG production capacity from 12 to 18 million metric tons per annum (MTPA). The consortium also plans to integrate valuable associated liquids such as ethane, propane, butane, and pentanes to enhance petrochemical feedstock output. The entry of Adnoc is nearing completion, with formal agreements expected soon. Regulatory clarity on Argentina’s Large Investments Incentive Regime (RIGI) remains critical to safeguard partners’ investment in Vaca Muerta’s wet gas fields, including acquisition plans from Pluspetrol.
Alongside LNG developments, YPF’s shale oil output reached a record 206,000 barrels per day, an 87% increase in two years. Capital expenditure is set to grow 20% in 2026 to $6 billion, emphasizing shale oil and shale gas productivity improvements, while proactively managing risks associated with oil price volatility. Strategic asset sales—Profertil fertiliser business, Manantiales Behr conventional fields, and a pending sale of Metrogas—are expected to generate liquidity of around $1.6 to $2 billion, fortifying YPF’s financial position. This counter-cyclical asset reconfiguration supports sustained upstream activity even if global oil prices fall below $60 per barrel.
Complementary investments include the Vaca Muerta Oil Sur pipeline, on track for early 2027 startup, expected to ramp up oil exports to 550,000 barrels per day by 2028, and a retail network revamp featuring partnerships such as McDonald’s in premium fuel offerings. YPF’s comprehensive strategy signals a scaling of Argentina’s hydrocarbons sector as a core export engine well into the next decade.
This article was curated and published as part of our South American energy market coverage.
