Zenith Energy today confirmed it had sold its operations in Argentina to a group of local energy investors.
The company acquired the Don Ernesto and Don Alberto fields in July 2010.
A Zenith spokesperson said: “Unfortunately in August 2015, due to a series of circumstances beyond the company’s control, production at Zenith’s Argentine operations was suspended. This was caused by the collapse of a major storage tank owned by Yacimientos Petrolíferos Fiscales, Argentina’s national oil company.
“This meant that Zenith’s production of oil could no longer be transported through YPF pipelines, resulting in the suspension of production in the Comodoro Rivadavia area where these fields are located.
“To date, the issues affecting the transportation of oil have not been fully resolved and a persisting uncertainty on the recommencement of operations has led Zenith to reconsider its operational involvement in Argentina.”
The sell-off will allow the firm to focus on its operations in Italy and Azerbaijan, according to the firm.
Chief executive Andrea Cattaneo said: “The disposal of our activities in Argentina is a strategic move. This will enable the company to positively recalibrate its operational footprint in a way that coherently reaffirms our Italian energy production interests and specifically the primary importance of our transformational opportunity in Azerbaijan. The risk of overstretching where the management team is active on too many fronts is now reduced.
“The Board of Directors and the management team will now be in a position to direct undistracted attention to the company’s primary objectives of achieving incremental production increases in Azerbaijan and continuing stable energy production activities in Italy.
“Zenith will also be able to evaluate the acquisition of additional production opportunities in the European and Caspian region, building on the momentum of its recent progress to further support the company’s continued expansion.”
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