Apache talking with Argentina about selling assets: sources
NEW YORK/BUENOS AIRES
NEW YORK/BUENOS AIRES (Reuters) - Apache Corp (APA.N) is in talks with Argentina's state-controlled energy company YPF (YPFD.BA) about a possible sale of its assets in the South American country, sources told Reuters on Friday.
U.S.-based oil and gas Apache has stakes in about 25 fields in Argentina. In May the company - which also has oil and gas operations in Egypt, Australia and the North Sea - announced plans to sell $4 billion of assets to cut debt and shore up its balance sheet and share price.
A source familiar with the matter in New York and an oil industry source in Buenos Aires, both of whom asked not to be named, said Apache and YPF were talking about the possible sale of at least some of Apache's Argentine investments.
Both YPF and Apache declined to comment.
Apache along with other global oil companies has rights to Argentina's giant Vaca Muerta shale oil and gas field.
The formation, in the southern Patagonia region, has 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas resources, according to YPF.
Apache holds rights to areas in Neuquén, Río Negro, Tierra del Fuego and Mendoza provinces. Assets in Argentina were responsible for around 6 percent of the company's production last year and 3 percent of its proved reserves at year end.
Apache spent more than $16 billion acquiring oil and gas properties over the last three years. Now the company is selling off assets as it has struggled to grow production.
The company struck a deal in July to sell its assets in the shallower continental shelf region of the Gulf of Mexico to private equity firm Riverstone Holdings LLC for $3.75 billion.
A U.S. Department of Energy report has shown Argentina holds 802 trillion cubic feet of commercially viable natural gas resources trapped in shale rock and 27 billion barrels of oil, the bulk of it located in Vaca Muerta.
That would make Argentina the second largest holder of shale gas reserves after China and No. 4 in shale oil.
Argentina is counting on Vaca Muerta to recover the energy self-sufficiency it lost a decade ago. The government has had to spend millions of scarce dollars importing energy, eroding its trade surplus.