YPF must fully disclose details of contract with Chevron – judge rules

Source: DollarPhotoClub

State-owned Argentine oil giant YPF was ordered by court to fully disclose details of its contract with Chevron Corporation amid rumours of hidden concessions which undermine national interests – Reuters reports.

Judge Maria Jose Sarmiento gave YPF ten working days to provide legislator Manuel Garrido with details, the judiciary’s internal news agency said.

YPF denied allegations of improper secret clauses and said in a statement that it abided by all the rules and requirements governing a company listed in Buenos Aires and New York. The company made it clear that it intends to appeal the decision.

In 2013, Chevron signed a deal with YPF to jointly explore the country’s huge Vaca Muerta formation. This was the largest foreign investment in Argentina’s energy sector since the government seized Spanish Repsol’s controlling stake in YPF.

The Vaca Muerta Shale is a continuous tight oil and shale gas reservoir which covers a total area of 30,000 square kilometres.

The U.S. Energy Information Agency (EIA) estimates total recoverable hydrocarbons from Vaca Muerta formation to be 16.2 billion barrels of oil and 308 trillion cubic feet of natural gas. In February 2012, Repsol YPF raised its own estimate of oil reserves to 22.5 billion barrels.

While YPF is already producing about 31,000 b/d of oil equivalent, mostly of light crude, from Vaca Muerta in partnership with Chevron, is has also recently sought partnership with Malaysia’s Petronas to explore the formation.

In September 2014, Petronas and YPF announced that they are to invest $550 million to jointly explore shale oil in the Vaca Muerta. This is on top of the $2.8 billion of joint investments so far announced by YPF and Chevron in the area.

Some believe that the total amount the two companies intend to invest in the Vaca Muerta could reach as much as $15 billion under the terms of the accord.

In total, Argentina is believed to have 802 trillion cubic feet of technically recoverable shale gas, which makes it the second richest shale gas country in the world, after China.

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