YPF chief projects US$300bn in exports from LNG deal with Italy’s Eni

YPF president and CEO Horacio Marín says a recent agreement between Argentina’s state oil firm and Italian giant Eni could lead to total exports of some US$300 billion over the decades, as well as the creation of 50,000 jobs.

In an interview with Radio Rivadavia, Marín highlighted last week’s signing of the agreement with the Italian energy company over the development of an LNG export project for the Vaca Muerta shale formation. The official said it was “the final investment decision, which means the deal is closed.”

President Javier Milei celebrated the agreement last week as “the biggest investment in Argentine history,” declaring it would “permit the annual export of US$12billion to US$20 billion worth of liquefied natural gas.”

Speaking at an event in San Nicolás, Buenos Aires Province, Milei said it would lead to “an investment of US$30 billion into Argentina over the next five years.”

Marín said Monday that average gas production at Vaca Muerta this year “will be doubled” thanks to the agreement. “We’ll export 75 million cubic metres daily,” he said.

Projected over the long term, the deal “could represent for Argentina US$300 billion in exports between 2031 and 2050,” said the YPF chief.
According to Marín, total investment will reach US$85 billion. Infrastructure requires US$25 billion, he said, indicating that “for that, the idea is to apply via the RIGI [incentive scheme for major investments] and seek financing.”

With respect to oil wells, he indicated that “up to 2031 we have to invest a further US$20 billion and from that year until 2050 the sum will ascend to US$40 billion.”

To convey the magnitude of the project, the YPF chief said that before December 2023, “153 wells were drilled, in these last two years around 210 have been drilled and now we must drill 800 wells in four years … YPF’s current activity must be doubled.”

Addressing employment, Marín estimates “50,000 direct and indirect jobs in these four years.” At the same time, he assured that “calculating rapidly, the project will pay out around S$120 billion in tax revenue.”

As for the earnings calculated for the years to come, prior to the initial impact of the new project, the YPF chief shared the forecast of US$10 billion for this year’s export earnings, US$13 billion or more for next year, reaching US$20 billion by 2027.

After 2030 “over US$40 billion,” he said, noting that such calculations are “always and when current prices are maintained.”

With respect to the role of the energy sector in this context, he maintained that "in the entire energy industry we are going to be an extraordinary primer for the economy," anticipating that next year the industry would be contributing numbers similar to the farming sector.

– TIMES/NA/PERFIL