Argentina's YPF, Russia's Gazprom talk strategy

AP News
Posted: Sep 04, 2012 5:05 PM
Argentina's YPF, Russia's Gazprom talk strategy

BUENOS AIRES, Argentina (AP) — Argentina's state-controlled YPF energy company reached a strategic accord Tuesday with Russia's Gazprom, the world's leader in natural gas production.

YPF announced no specifics following the meeting in Moscow led by YPF President Miguel Galuccio and Gazprom board president Alexey Miller, but said the accord could lead to partnerships with the Russians in drilling for shale oil and gas in the South American country, as well as more supplies of Russian liquefied natural gas for Argentina's energy-hungry economy.

Argentine President Cristina Kirchner and her Russian counterpart Vladimir Putin had set Tuesday's strategy session in motion during their encounter in Mexico during the last G-20 summit.

"It was a positive meeting and another open door to move forward with the ambitious goals we have set for ourselves," said Galuccio, who brought to the meeting Juan Garoby and Pablo Vera Pinto, his top executives for non-conventional resources and international finance. "Gazprom is the most important gas company in the world and we've found points in common to rapidly explore a shared collaboration.'

Galuccio is on a global road trip in search of partners and plans to talk to America's major oil companies in the U.S. later this month.

YPF's immediate goals include reversing years of production decline and increasing oil and gas output by 32 percent in five years. It also hopes to invest $37 billion in the world's third-largest shale reserves, after U.S. and China. Analysts have predicted that YPF can only meet its goals with outside help, but the five-year plan Galuccio unveiled last week would have YPF pay for most of the development by reinvesting its own revenues.

His message: Foreign partners are more than welcome in Argentina, but YPF will go it alone if it must.