Argentina's YPF Reports Net Loss in Q4 Despite Higher Oil & Gas Output

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Argentina's state-owned oil and gas company YPF reported a net loss of US$1.86 billion in fourth-quarter 2023, compared with profits of US$464 million in fourth-quarter 2022. The energy producer registered similar results for the whole of 2023, with losses amounting to US$1.27 billion compared with profits of US$2.23 billion in the previous year.

The losses were caused mainly by lower oil prices and impairments. Last year, YPF had a non-recurring impairment of property, plant and equipment charge of US$2.28 billion.

This comes despite the company's higher hydrocarbon output. In the fourth quarter, the company produced 511,000 barrels of oil equivalent per day (BOE/d), 2.3% more year over year.

Throughout 2023, YPF produced 514,000 BOE/d, also 2% higher than in 2022. Oil represented 47% of the total volumes, while natural gas and liquefied natural gas accounted for the remainder.

Shale output has been increasing in the last few years, growing from 18% of YPF's total production in 2019 to 46% in 2023. This comes as YPF invests in the development of its assets in Vaca Muerta, the world's second-largest gas and fourth-biggest oil non-conventional reservoir. By 2027, the company projects shale output of about 250,000 barrels per day (BBL/d) of oil.

One of the biggest challenges to boosting production from Vaca Muerta is expanding midstream capacity to transport hydrocarbons from the area to export and refining hubs. Throughout last year, YPF worked on the 20,000-BBL/d expansion of the Oldeval pipeline system to reach a capacity of 300,000 BBL/d.

The company also reactivated the Transandino pipeline, which connects Chile and Argentina, after 18 years of inactivity. This allowed YPF to export Medanito oil to Chile, which accounted for 19,000 BBL/d in the fourth quarter, and is expected to increase in 2024.

On the downstream front, the company processed 294,000 BBL/d across its refineries and had a 90% utilization rate. The company has a projected refining rate of 320,000 BBL/d for 2025. Among the key downstream enhancements conducted last year was revamping the topping units at the La Plata refinery.

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