YPF Chief Readies War Chest for Shale Push as Milei Bolsters Oil

YPF SA is setting aside funds to keep up spending in the fast-growing Vaca Muerta basin even as oil prices fall this year, as the administration hand-picked by libertarian President Javier Milei tries to turn the state-run company into a global shale gas star.

“We have prepared ourselves,” Chief Executive Horacio Marin said during an interview in Buenos Aires on Wednesday. “We managed our portfolio very well so that we did not need to reduce investment in an environment of low oil prices. Our investment expenditures do not change whether the barrel is $70 or $55.”

YPF, arguably Argentina’s largest oil producer, invested $3.5 billion in production in the 12 months until September. Marin wants spending to stay at that level to maintain momentum in the company’s shale gas push and deliver on its promise of big returns to investors. A new policy move to encourage Milei crude oil investments would also help.

“This is the key year,” said Marin, the 62-year-old oil veteran who will lay out YPF’s full strategy for 2026 in its Feb. 27 earnings call. “Because this is the last year of our transition and then we can go.”

Marin said YPF wants to exceed 200,000 barrels per day of shale oil this year; That figure was down from 170,000 barrels in the third quarter of 2025 after two years of aggressive cost-cutting and investments. The move included two recent asset sales that added an extra $1 billion to the company’s war chest and a pending deal to exit natural gas distributor Metrogas SA.

If its plan to grow profits over the next few years is successful, YPF is aiming for its first shareholder dividend payment in a decade. Its shares, traded in New York, have gained 127% since Milei took office and are worth about $38. Marin’s goal is to reach $60 by the end of 2027, when Milei completes his term.

The Vaca Muerta shale oil patch in Patagonia is key to Milei’s plan to stabilize Argentina’s crisis-prone economy because it could lead to huge energy trade surpluses, including last year’s record. That’s why the government on Thursday expanded its important investor incentive program to include shale oil drilling.

Previously, the oil element of the program, known by its Spanish acronym RIGI, included only upstream features such as separation facilities, pipelines and offshore exploration. The expansion to shale wells (minimum investment for a single project is $600 million) will “accelerate the use of pipeline and export infrastructure and at the same time increase competitiveness” by encouraging more production, the government said in a decree.

“It’s going to be great for the industry,” Marin said from his corner suite overlooking the River Plate estuary.

By greatly improving the economics of energy and mining projects, RIGI’s tax, currency and customs advantages could help attract U.S. independents looking to take their shale expertise abroad as the so-called Tier 1 field in the Permian Basin is depleted.

Continental Resources Inc., owned by shale billionaire Harold Hamm, recently became the first of the independents to bet on Vaca Muerta. Marin, Continental and also Devon Energy Corp., which acquired Coterra Energy Inc. earlier this month to become one of the world’s largest shale oil companies. He said that he was chatting loosely with him in order not to make a deal.

“Argentina is a logical destination for these companies to continue growing,” Marin said. “Their geologist loves Vaca Muerta; we’ve discussed it informally.”

RIGI could also help counter the potential rebirth of the massive oil industry in Venezuela, where Marin worked for several years.

While Venezuela produces heavy and sour crude as opposed to Argentina’s light and sweet shale oil, the YPF president highlighted how extra regional production highlights the need to keep costs low. “We can’t have fake costs because that’s exactly what takes you away from the competition,” Marin said.

Besides shale oil, Marin also manages Argentina’s signature liquefied gas export project, a partnership between Italy’s Eni SpA and Abu Dhabi National Oil Co.’s XRG, which will ship at least 12 million tonnes of LNG per year, as well as copious natural gas liquids.

With XRG now approved as a partner (it made the commitment binding last week) the hunt for at least $14 billion in funding is now heating up. In any case, this will be the largest project financing deal in Argentine history. Marin compared collecting the cash, some of which may come from export credit agencies, to a puzzle.

“We need to see how we put this together,” he said. “There are many banks that offer very expensive starter tickets.”

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