Pampa, Tecpetrol Eye Unconventional Potential In Northern Argentina

Instant Max AI

(S&P Global Platts, 27.Feb.2019) — Pampa Energia and Tecpetrol, two of the largest energy companies in Argentina, plan to launch the first exploration for unconventional oil and natural gas in the northern province of Salta, expanding on their fracking in the huge Vaca Muerta shale play in the southwest, a provincial source said Wednesday.

The companies signed an agreement Monday with the provincial government to invest $7 million to explore the Rio Colorado block, starting in the second quarter, the source said on the condition of not being named, citing state policy.

Two wells are to be drilled, targeting conventional plays and the Los Monos unconventional play, the source added.

While the investment is minor compared with the $2.3 billion that Tecpetrol is investing on its own in one block in Vaca Muerta, it is a sign of the interest to expand fracking in the country.

So far, Vaca Muerta has been the big draw since it started getting tested in 2012-13, attracting billions of dollars of investment from global majors like Chevron, ExxonMobil and Shell on the quality of the resources in one of the world’s largest shale plays.

Vaca Muerta’s initial development has turned around more than a decade of decline in Argentina’s oil and gas production, and while only a small fraction of the play is in production, a number of companies are looking further afield, such as to the D-129 shale play in the south.

Carlos Ormachea, Tecpetrol’s CEO, said in a statement the Salta government issued that the deal to explore Los Monos “opens new horizons” for unconventional oil and gas exploration.

Tecpetrol produces nearly 14% of the country’s 129 million cubic meters/day of gas and 3.3% of its 498,000 b/d of crude, while Pampa Energia accounts for 3.4% of the country’s gas output and minor amounts of oil, according to data from trade group Argentina Oil and Gas Institute.

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