(WO) - Interoil E&P has completed its exit from conventional oil and gas operations in Argentina, joining a growing list of operators scaling back or withdrawing from mature onshore assets in the country’s Santa Cruz province.
The company confirmed it has divested its interests in the Santa Cruz Sur joint operations—set to expire between April and August 2026—as well as the La Brea block. The transaction also includes the transfer of rights associated with the Mata Magallanes Oeste production concession and the Cañadón Ramírez exploration block.
Interoil said the decision follows a comprehensive review of its conventional onshore portfolio and reflects a broader strategy focused on disciplined capital allocation and a shift toward non-conventional opportunities.
The company cited a sustained deterioration in the operating and investment environment in Santa Cruz as a key driver behind the move. Over recent years, several major international and national operators—including YPF, Pan American Energy, Petrobras, Sinopec and TotalEnergies—have reduced or exited conventional positions in the region as asset competitiveness declined and operating costs rose.
According to Interoil, increasing fiscal and regulatory complexity, labor and social disruptions, and reduced long-term investment visibility have weighed on capital allocation decisions across the basin. These challenges, combined with the mature nature of many conventional assets, have contributed to a less attractive operating environment for large-scale investment.
The Argentine assets were sold to a local investor in a transaction valued at up to $1 million, payable in contingent installments tied to production performance. Interoil will also retain an overriding royalty interest equivalent to 80% of profits generated from production exceeding specified thresholds.
Interoil CEO Leandro Carbone said the exit marks a significant strategic milestone for the company and will allow it to sharpen its focus on higher-return opportunities, including non-conventional energy assets and select complementary investments.
The withdrawal is being carried out in coordination with local partners and regulators to ensure an orderly transition. Interoil said it remains committed to maintaining operational responsibility throughout the process while repositioning its portfolio toward assets with stronger long-term competitiveness.
