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ECONOMY | 24-02-2024 19:15

Exxon to weigh US$1 billion sale of Argentina shale assets

Exxon Mobil is mulling bids for its Argentine shale assets as the US energy giant looks to unwind its bet.

Exxon Mobil Corp is mulling bids for its Argentine shale assets as the US energy giant looks to unwind its bet on the South American nation’s oil and gas riches.

Exxon received several offers for holdings in Argentina’s heralded Vaca Muerta formation in Patagonia earlier this month, according to people familiar with the matter. The assets, which comprise stakes it owns with QatarEnergy in seven oil-and-gas blocks in the shale patch as well as holdings in a pipeline, have been valued at around US$1 billion, said the people, who declined to comment publicly on private talks.

Exxon’s push to sell the assets is unfolding even as drillers welcome a more hands-off approach by Argentina’s new President Javier Milei toward the oil-and-gas industry than the previous government.

An Exxon spokesperson declined to comment.

Exxon put all of its shale assets in Argentina under review last year in a move seen as a blow to the Argentine government’s hopes of fully tapping the riches of Vaca Muerta — Spanish for "dead cow." The region’s geology rivals US basins like the Permian, but drilling has been held back in part by protectionist policies, leaving the lion’s share to national energy companies.

Three of those companies — YPF SA, Pampa Energía SA and Tecpetrol SA — are partners in some of the acreage Exxon is selling.

Argentina’s economic protectionism is being undone by Milei, who rose to power in December promising sweeping deregulation. Drillers are already benefiting from his government’s market-oriented approach that has seen oil and fuel prices rise toward so-called export-parity levels. To really lure global investors to Vaca Muerta, Milei still needs to undo capital controls to allow companies to freely send profits abroad.

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by Jonathan Gilbert, Bloomberg

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