YPF SA (ADR) (YPF), Chevron Corporation (CVX): Life at Last for the “Vaca Muerta” Shale Area

The two aforementioned points have been making most major oil companies pause their investments in Argentina until the outlook ameliorates (as is happening right now.) I think that Repsol will finally be compensated through a mix of acreage in Vaca Muerta and cash. As a matter of fact, YPF recently offered Repsol a deal. Valued at $5 billion, it was considered too low by the Spanish oil company.

Foolish conclusion

John Watson, Chevron Corporation (NYSE:CVX)’s CEO, described Vaca Muerta as a “world class” asset while Miguel Galuccio, YPF SA (ADR) (NYSE:YPF)’s CEO, described the deal as “a demonstration of trust by a great international company.” Galuccio also said “We are putting in production a resource that may change the energy future of our country.”

After a decade of stagnant investments due to the lack of sustainable  energy policies, Argentina lost its energy self-dependence and is importing over $12 billion of oil and derivatives per year. I think of this deal as a step forward. YPF has scattered an ambitious $37.2 billion investment plan, but the Argentinean company needs foreign partners to help finance the expensive shale drilling. My bet is that other companies such as the Sino-Argentine company Bridas or Brazil’s Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR) will follow Chevron Corporation (NYSE:CVX) soon.

The article Life at Last for the “Vaca Muerta” Shale Area originally appeared on Fool.com and is written by Federico Zaldua.

Federico Zaldua has no position in any stocks mentioned. The Motley Fool recommends Chevron. Federico is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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