Could you summarize the key developments at YPF Química over the last year?

First, we consolidated our position in the region, growing our market share, especially in Brazil. For some years now, YPF’s primary chemical production capacity has exceeded local demand, which is why we have been looking for external markets.

Second, we continue advancing our modular pyrolysis project, managing the risks and challenges of developing a new technology for a very nascent market, while also making progress at our Industrial Advanced Recycling complex.

Third, we successfully completed pilot tests and reached the industrial production phase for a new line of products for the Oil & Gas markets, using our Y-TEC technology for a comprehensive proposal: product, application, and field monitoring.

What are the main dynamics in the methanol and aromatics markets in Argentina and Latam?

A prolonged drought this year has severely affected soybean production. Adding to this the macroeconomic conditions in Argentina, biodiesel producers will not be profitable this year, which has pushed down methanol sales in the local market. However, we expect the industrial segment in the region will continue to drive demand, and new applications like low-emission fuels will generate new market niches. Meanwhile, demand for aromatics and solvents remains strong, and international prices for aromatics have been sustained since record peaks in July 2022.

As a petrochemical player, how is YPF Química positioned for a long-term future where the use of fossil fuel-derived products is supposed to decline?

Thanks to our investments, I do not see any threat concerning the demand for YPF’s products. What we call “traditional products” will, at some point be subjected to more regulations and requirements. By making pyrolysis oil a reality, we have at hand a circular feedstock to make new products that meet those requirements. One may wonder why a petrochemical company is focusing on plastics recycling when we are not producing plastics. This is intentional: while there are many uses for pyrolysis oil, there are few offtakers with the capacity to transform it into petrochemical products. We treat the CYQLO OIL (which is our registered trademark for pyrolysis oil) as a conventional fuel, going to the very beginning of the value chain to make petrochemicals. Further along, we are also looking at opportunities of producing bio-methanol, by capturing emissions and reincorporating them in the gas to create biogas. Today, YPF is a pioneer in these technologies in Argentina, but making these efforts now gives us reassurance that we will be at the vanguard of the future demand of our customers.

YPF allocated US$5 billion capex for this year, 20% higher than last year. Could you comment on the strategy and focus of these investments?

YPF’s investment plan is focused on the massive development of non-conventional resources at Vaca Muerta (US$2.3 billion), with a view to monetizing crude oil, monetizing natural gas, and developing lithium and clean energy value chains. As an integrated company, YPF goes all the way from the production and transportation of oil and gas, to refining, under which we have the production of petrochemicals and commercialization. What we need today is to secure a competitive production of oil and gas that is well aligned with the demand curve. Our focus is to invest most of those US$5 billion in today’s production, especially of shale oil. YPF’s growth strategy is based on the development of Vaca Muerta resources, cost efficiency and financial discipline. We want to double crude oil production in five years and increase gas production by 1.5 times. We aim to become an energy exporting company in the region and to be an LNG player for the rest of the world.

The focus of today is to ensure the basis - the raw materials essential for the petrochemical industry to keep growing. Nevertheless, YPF has been investing in the development of green energies through YPF Luz, which has become the second-largest producer of clean energy in Argentina, generating approximately 100 GW.

At the same time, we have other projects rolled out on the refinery side. Now in its second year (out of three), we have reconfigured our refinery to produce de-sulfurized fuels (with lower sulfur content). Next year, we will also increase our aromatic production after revamping projects at of our La Plata production site. Currently, we have more than 30 products in our petrochemical line.