YPF, the majority state-owned oil company, signed a memorandum of understanding with Oil and Natural Gas Corporation Ltd. (ONGC), the largest company in the industry in India.
Pablo González, president of YPF, signed the agreement with Shri Hardeep S Pur, oil and gas minister of India.
MoUs are decisions by companies to collaborate on certain projects. In this case, they will work together in Areas of upstream exploration and development for both oil and gas. There will also be mutual visits, training and research between the parties.
This type of deal can sometimes lead to large investments, but there are cases where the statement remains and nothing happens.
India is one of the markets for higher growth in oil consumption. When a long list of countries stopped buying Russian oil, two countries jumped at the opportunity to try and get it at a discount: China and India.
While they pay less than other buyers from Russia, they have access to supplies they didn’t have before. Moreover, the two economies are so big that they can give up trade relations with the European Union or the United Stateswithout fear of sanctions for linking with Russia.
Memoranda of Understanding give different results. Under the direction of Miguel Galuccio (2011-2015) YPF signed such an agreement with Chevron, which facilitated the development of Loma Campana, in Dead Cow. It was a controversial contract, because it contained secret clauses, but it got the first-scale production at Vaca Muerta. But YPF has also signed a similar agreement with Bridas, controlled by the Bulgheroni family and the Chinese CNOOC. And that memorandum fell and was rendered ineffective, as the parties failed to agree on the joint development they thought of.
More here in time, the main memorandums (they are called MOUs, for its initial acronym in English) of YPF were with Equinor and Petronas. The first is for the development of offshore areas. They have already started with a project in Mar del Plata, which is meeting resistance from environmental groups, although it has authorization from the Ministry of the Environment. The second is for the construction of an LNG terminal, the liquid gas which is exported.
In both cases, investments can reach billions of dollars. But they have yet to bear fruit. The offshore platform is just taking its first steps and the project will not reach significant speed until the end of the year.
Building an LNG terminal requires unprecedented disbursements for the amounts that are handled in the country. Petronas offers to make payments together with YPF. But they are still in a study phase. A bill will be sent to Congress to encourage and stimulate investment in this sub-segment, as there are similar ideas from other oil companies as well.
YPF already had experience in exporting LNG. He brought in a ship that processed the gas and converted it to LNG. But the project was canceled due to the pandemic. LNG prices had fallen.
LNG quantities increased again after the Russian invasion of Ukraine. While Europe decides it will no longer buy gas from Russia, LNG will have a market in major Asian and European economies. For this Argentina is considering joining the small group of exporters of LNG, led by the United States, Qatar and Australia, with a growing influence from Norway.
Source: Clarin
