Pablo González is a lawyer and notary public graduated from the National University of La Plata with a Diploma in Hydrocarbons Law from the Austral University and has had an extensive career not only in the public but also in private sector.
Since February 2020 Pablo González is the president of the YPF Board of Directors.
We have had the opportunity to interview him to communicate the company’s progress.
YPF in Vaca Muerta has had a record production this year. In addition, approximately 60% of the country’s unconventional oil production comes from YPF. Is the increase in production only due to a political decision of the company or to the application of new and more efficient extraction techniques?
It is a combination of both. YPF has been developing the unconventional in the country for 10 years. It was together with the political decision that the recovery of the company was allowed, and the agreement with Chevron was signed and a path was started to put into production the fourth oil reserve and the second gas reserve in the world. We were the pioneers in this type of development in the country .These ten years have allowed us to learn and become more and more efficient.
Since we started developing the unconventional, there was a 40% decrease in the production cost, the productivity of the wells increased 35 %, which allowed a decrease in the development cost of 56 %. In this way, YPF’s development cost in Vaca Muerta is at levels comparable to those of the Permian in the United States, at an average of less than 8 dollars per barrrel.
At present, we have demonstrated that we can efficiently produce this resource and we are going to advance rapidly in its development in order to firstly, achieve self -sufficiency of our refineries and secondly, generate an export base of crude oil and gas to the region and the world.
The oil company reduced its debt exposure,increased its cash flow and is in a position to finance its investmentes with its own funds. How were these positive results achieved? What are the investment and production objectives in the short and medium term?.
During these three years of management we were able to overcome a very complex situation that the company was going through, with a drop in investment, a fall in activity, a drop in production and an incease in indebtedness.
This year we presented very good results, achieving a solid financial position with an EBITDA that exceeded 1.5 billion dollars in each quarter. This year should close with a 9% growth in production, which would be the most important organic growth in the last 25 years.
The fact of having got the company moving again is what allowed us to reduce the debt significantly to the levels of 2015 and which is absolutely manageable from the cash flow we generate .
Fort he next year we are thinking about an ambitious growth plan with investments of approximately 5,000 million dolllars, which will allow us to continue with a growth agenda that includes conventional production, the development of Vaca Muerta and offshore exploration.At the same time, we promote the energy transition with the production of renewable energies, lithium and hydrogen through YPF LUZ, YPF Litio and Y-TEC-.
Will the GPNK enable the development of investment plans in Vaca Muerta?
The companies’s challenge for this section of the pipeline is to offer 11 million cubic meters per day. It is estimated that the gas pipeline will allow saving more than U$S3,500 million during 2023 due to the substitution of energy imports at current prices. Expectations for the Gas V Plan are promising.
Based on the results that YPF and the industry as a whole are obtaining in Vaca Muerta, we are facing a limitation, which is the transportation of both oil and gas .Therefore, the Néstor Kirchner gas pipeline project is strategic to be able to go ahead with the gas and production plans and supply Argentine men and women with energy at much lower prices than those currently obtained in a world marked by an energy crisis.
This result was also promoted by the IV Gas Plan ,which boosted the investment of all companies in gas once again. In our case, production doubled in the last two years.
The plans with the new Plan are to continue developing projects to supply the domestic market and contribute to save foreign currency by reducing winter imports and to generate new foreign currency through exports to Chile in the short term, and to the region and the world in the medium and long term..
Next year, the company will be part of the reopening of the Trasandino Pipeline, a central route for the expansion of shale oil from Vaca Muerta to Chile. Will YPF be able to export? What would this depend on?
As I was saying, at the moment it is essential to think about the investments that will allow us to improve the capacity to transport crude oil and gas from Vaca Muerta very quickly. The rehabilitation of the Trasandino Pipeline is one of those projects whose main objective is to be able to evacuate Vaca Muerta’s production through Chilean ports with a transport capacity of 160,000 barrels per day.
In addition, we are moving forward with a very ambitious project which is to build a pipeline between YPF’s developments in Vaca Muerta and Punta Colorada in the province of Rio Negro (700 kilometres). In that area , it is also expected the installation of a terminal with 20 storage tanks and the installation of two monobuoys for the loading of large vessels. This work will allow the increase of transportation capacity to 300,000 barrels of crude oil per day for export through the Atlantic with an investmen t of 1.2 billion dollars.
Finally, we are working on the expansion of OLDELVAL, which links the Neuquén Basin with Puerto Rosales in Bahía Blanca. It is the main oil transportation artery in the country and the project implies doubling its current capacity.
Are there any important projects in Mendoza for the exploitation of Vaca Muerta Basin?
Yes , indeed. We are moving forward into the first Non-Conventional pilot project to Vaca Muerta outside Neuquén , which will allow us to evaluate the potential of the formation in Mendoza’s terrritory.Preliminary work for the subsequent drilling of two horizontal wells is already underway south of Malargue, in the Paso de las Bardas Norte area.
President Alberto Fernández announced an agreement between YPF and the Malaysian state oil company Petronas to build a liquefaction plant to export gas from Vaca Muerta to other continents. Is there any concrete progress in this respect? What is the status of the project to build the gas liquefaction plant in Bahía Blanca?
This is a strategic project for the country. The magnitude of the gas resources in Vaca Muerta, which have the capacity to supply the country for 100 years, make us think about a project to export LNG to the world.We are working on this initiative with Petronas, which is the third largest LNG producer in the world and has been a partner of YPF in non-conventional projects since 2014.
The project is moving forward into its technical studies stage in all the stages that include the development of a gas field in Vaca Muerta, the construction of a gas pipeline to the processing terminal that could be located in Bahía Blanca. Finally, for industrialization, at an initial stage, the arrival of two liquefying ships is foreseen.In a second stage, progress will be made in the construction of a scalable liquefaction plant with a final poduction capacity of 25 million tons per year,equivalent to 465 methane tankers.
The project will have a huge positive impact on the country, reducing external restrictions, multiplying economic activity, and generating thousands of jobs. It is estimated that exports could reach a value of U$S 13 billion at peak production, equivalent to U$S 80 billion at current LNG values.
Is Y-TEC working on manufacturing electrolyzers to be integrated into wind farms so as to reduce the imported components that make projects more expensive?
Y-TEC, the research center that YPF has in partnership with CONICET, plays a key role in the development that we are promoting of renewable energies and the development of local technology that allows us to add value to raw materials such as lithium, or to substitute imports.
In the latter case, a group of researchers from different centers in the country is working on the design, development and construction of a high-power electrolyzer. The prototype would have a power of 10 KW and contemplates a scaling up to 1.15 MW .
The objective is to be able to reproduce this technology, which is already available in the world, locally and transfer this knowledge to the productive sector so that it can advance in its production at scale.
This is the same process we are carrying out with the production of lithium-ion bateries. In December we started to install the equipment in the plant installed in Berisso for the production of these batteries. Once in operation, the plant will have an anual production capacity measured in stored energy of 13 MWh , equivalent to 1,000 batteries for stationary storage of renewable energies or about 50 for electric buses.
The project we are carrying out with the National University of La Plata and the National Ministry of Science andTechnology is a strategic bet to unbundle the technological package and generate the conditions to carry out technological transfers to SMEs , national and provincial companies interested in the manufacture of lithium batteries.
Has it been possible to advance with the green hydrogen production projects?
With Y-TEC , we are also leading the Consortium for the Development of the Hydrogen Economy in Argentina (H2ar), where more than 50 companies of all types collaborate and contribute to develop the uses of hydrogen in the country.
Argentina has excellent natural conditions for hydrogen generation, both through its highly competitive renewable resources and its significant natural gas reserves. In addition, it has a highly capable science and technology system to address early technological challenges with good expectations. These starting conditions allow projecting very competitive hydrogen costs that underpin the attractiveness for the search of opportunities.
