(Energy Analytics Institute, 12.Sep.2024) — Pan American Energy Upstream Managing Director Fausto Caretta spoke on 12 Sep. 2024 at the ‘Shale en Argentina’ event in Houston, Texas during a panel discussion about ongoing and future developments in Argentina’s Vaca Muerta formation.
What follows are excerpts from his participation in the panel, including comments on opportunities and challenges.
Highlights from Fausto Caretta’s participation in the event.
—Production reached a record 8 MMcm/d in 2023; production in 2024 is expected to reach 12 MMcm/d, including around 20,000 b/d.
—”We have drilled more than 128 wells, which seems a small number because our main focus so far has been to de-risk the six blocks that we operate. We just acquired two new blocks which are adjacent to our existing blocks and then we also participate in two other blocks in a non-operated fashion with leading companies.”
—Pan American has a gas hub in Vaca Muerta, which is located in a premium gas window.
—Pan American just signed an agreement with Golar to bring a floating LNG facility in Sep. 2027, which will allow Pan American to ramp up production to 16 MMcm/d.
—600 targets have been identified.
—The current focus is on a new central processing facility, which will have capacity of 11,300 m2. The goal is to fill the capacity and maintain production for 30 years.
—Total wells to drill are around 1,500 wells.
—”If we take our current drilling rate of more or less 50 wells a year, that’s a very long time to drill. So obviously we want to ramp up, we want to increase capacity, but there are challenges. But what we see is that to go to the next level of efficiency and the next level of profitability, we need to introduce even more technology.”
—”In the last decade or so, Argentina has had a lot of restrictions or constraints to import technology; but the market now is opening up and the restrictions are getting smaller to the point where it is easier and very attractive to technology nowadays.”
—”So, it’s just a question of identifying what are the best technologies, the ones that are going to make the largest impact and mobilize them, bring new players as well, new service companies who see the potential in the Vaca Muerta and see the famous change that everybody talks about nowadays in Argentina. And then find the right partners, strategic partners or clients to deploy your technology.”
—”On average, we’ve been investing $600mn a year. This year we invested $900mn because we have a lot of facility investments.”
—”Compared to the Permian Basin, on the drilling side it is 20% more expensive; on the completion side, we are roughly around 30% more expensive. So that for us is the main challenge.”
—”We certainly see that there’s a big gap in the drilling time.”
—”We have logistics problems, the distances in Vaca Muerta are massive. The roads are not the best roads in the world, so we see a lot of time loss in the logistics.”
—”The population or the ecosystem of service companies in Argentina is relatively small and due to the import limitations and probably the lack of credibility in Argentina, most of the service company were not bringing a lot of equipment. So, we rely on instance on a downhole motor not to fail because if it fails there are no spares and that creates a lot of NTP [non-productive time].”
—”The frack crews we have in Argentina do not use the latest technology or not the most efficient units in the world. So, there’s a lot of improvement to come from bringing in new, more modern and more efficient equipment.”
—”There are many discussions on dual fuels, there is plenty of gas, especially in the gas window. We can use the local gas to power up the engine and save money on logistics and diesel. And eventually if the development continues and we build a case for electrification, there could also be an opportunity for electric fracking. I don’t think the timing for electric fracking is now, but eventually we’ll move into that direction very soon.”
—”My invitation is to most service companies of different sizes and with different expectations to come to Argentina to see where these challenges are, where they can bring value and I’m sure there will be a lot of opportunities that can be sorted out.”
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By Ian Silverman and editors at Energy Analytics Institute. © Energy Analytics Institute (EAI). All Rights Reserved.
NOTE: Energy Analytics Institute was an official media partner for the event.