Thirty-two percent apiece. That is what XRG, the international investment arm of Abu Dhabi National Oil Co (ADNOC), and Italy’s Eni will hold in three gas blocks in Argentina’s Vaca Muerta shale basin, once their newly signed purchase agreements with state-run YPF close. YPF keeps the other 36 percent.
The deals were announced on Monday, June 29. The blocks are Meseta Buena Esperanza, Aguada Villanueva and Las Tacanas, all onshore and all operated by YPF.
What the blocks are for
Their gas is meant to feed Argentina LNG, a 12 million tonnes per annum export project. The plan calls for two floating liquefaction units in the Patagonian province of Río Negro, each rated at 6 mtpa. YPF is targeting a final investment decision in the second half of 2026.
The blocks also help the project in a second way. XRG said the upstream assets would support the sale of condensates that come out of the ground with the gas.
The stakes extend a joint development agreement that XRG, YPF and Eni had already signed for the project.
What the executives said
“Argentina has the potential to play an increasingly important role in meeting the world’s growing demand for natural gas,” said Mohamed Al Aryani, XRG’s president of international gas. He added that Vaca Muerta is “one of the world’s most attractive gas resources” and that the deal gives XRG a direct role in the project.
YPF Chairman and CEO Horacio Marín described it as another step in building Argentina LNG. With Eni and XRG now in the upstream segment, he said, the project’s value chain is stronger and YPF can move toward developing it on a global scale.
XRG’s wider gas book
For XRG, this is its first upstream position in the venture. Its existing gas and LNG interests include Rio Grande LNG in the United States, the Absheron offshore gas and condensate field in Azerbaijan, and the Offshore Block 1 concession in Turkmenistan. It also holds the Area 4 concession in Mozambique’s Rovuma basin, which covers the planned Coral North floating LNG project and the onshore Rovuma LNG development.
The politics matter in Buenos Aires too. President Javier Milei’s government is pushing a $30 billion energy export strategy built around Vaca Muerta, with the aim of building up the central bank’s U.S. dollar reserves. Other pieces include the Vaca Muerta Sur (VMOS) pipeline, a $2.6-billion crude project that will carry Neuquén basin oil to a new export terminal at Punta Colorada, and the Southern Energy (SESA) floating LNG consortium, which is aiming for roughly $2.5 billion a year in foreign exchange earnings. The government’s RIGI incentive regime offers 30-year tax breaks, customs relief and deregulated export rules to long-term infrastructure projects.
Sources
- ADNOC, Eni Acquire Stakes In Gas Blocks Linked To Argentina’s LNG Project | OilPrice.com
- ADNOC's XRG to acquire 32 percent stake in upstream assets to supply Argentina LNG project
