YPF Plans $44 Billion Investment in Five Argentine Shale Oil Projects
Key Facts
Argentina’s YPF plans to file applications in the coming weeks to include five shale oil projects in the northern Vaca Muerta formation in the incentive regime for large investments known as RIGI, Reuters reported, citing the company on October 28. The company estimates the projects will require about $44 billion in investment over 26 years. The plan includes drilling about 2,200 wells, with expected peak output of 270,000 barrels per day of shale oil. YPF operates the projects with an average participating interest of about 40%. The announcement sets a timeline and capital scale for a long-term development plan, while applications for the five projects are still expected in the coming weeks.
The plan comes as shale oil has come to account for the largest share of YPF’s oil output. The company’s average shale oil production reached 224,000 barrels per day in the third quarter, up 32% from the same period a year earlier, according to La Nación. This output represented 86% of the company’s total oil production during the quarter. That means the announced projects build on existing activity that already accounts for most of YPF’s oil output, with planned peak capacity exceeding its average shale production in the third quarter. The company puts 270,000 barrels per day as the estimated production ceiling at the projects’ peak, not as current output.
YPF recorded investments of $1,287 million in the third quarter, up 26% year on year, according to La Nación. The company allocated 70% of its funds and 97% of its upstream budget to unconventional operations, a category that includes shale oil activity. These figures highlight the focus of current spending on unconventional operations alongside the new project plan, whose estimated investment is spread over 26 years. In the same quarterly results, the company reported net profit of $1.2 billion, compared with a loss of $198 million in the third quarter of the previous year, according to Reuters. This shift in net results provides financial context for the announcement of long-term investments, without the company attributing any stated goal of improving viability or reducing financial burdens to the RIGI projects.
Chairman and Chief Executive Horacio Marín said the company’s revenue reached $6.6 billion in the third quarter, up 41% year on year, while adjusted earnings before interest, taxes, depreciation and amortization reached $2.5 billion, up 84%. Management said net leverage fell to 0.81 times, its lowest level in more than a decade. Chief Financial Officer Pedro Kirn said liquidity “covers more than 2.5 years of our debt maturities.” These indicators put operating and balance-sheet results alongside the investment plan, which the company estimates at tens of billions of dollars over more than a quarter century. The disclosed information did not specify the annual spending breakdown for the five projects.
YPF distinguished the five shale oil projects from a separate project to export liquefied natural gas. In its quarterly report, the company announced an application to join RIGI for an integrated liquefied natural gas export project valued at $51 billion, according to La Nación. This project is separate from the $44 billion shale oil plan, so the two figures do not form part of a single investment. The export plan is also linked to the VMOS pipeline project; YPF management said the pipelines are expected to be filled in January 2027, with full export operations to begin in March 2027. Management added that the project was about 85% complete as of September 2026.