Argentine state-run oil company YPF SA is evaluating the potential sale of its lithium business, YPF Litio, as part of a broader strategy to focus on the development of the Vaca Muerta shale formation, reported Bloomberg News, citing a source.

The divestment is aimed at consolidating investments in the company's core areas of expertise, which include oil and gas exploration and crude refining.

This move would mark a shift in YPF's operations, which have traditionally not included lithium exploration and production.

YPF Litio has been active in the lithium-rich Catamarca province, part of the lithium triangle that Argentina shares with Chile and Bolivia.

Under the new administration of President Javier Milei, YPF's priorities have shifted towards maximising output in the Vaca Muerta shale region through increased drilling and infrastructure projects.

YPF has already divested from 22 non-shale fields and is negotiating the sale of approximately 30 more.

The company is also considering selling its fuel operations in Chile and Brazil, as well as a stake in a Buenos Aires-based natural gas distributor.

Additionally, the company is exploring two new oil prospects: another shale formation and offshore blocks in the Atlantic.

Last month in Argentina, Kobrea Exploration signed an option agreement to acquire up to a 100% interest in the Western Malargüe copper project.

Kobrea must issue up to 3.5 million common shares and make cash payments totalling $6.76m (C$9.12m) by 2029.

Located in Mendoza province, the Western Malargüe copper project is part of the prolific Neogene Porphyry Belt, known for hosting some of the world’s largest copper deposits.