YPF Says Combined Output Plummets 4.3% In 3Q:18

(Energy Analytics Institute, Aaron Simonsky, 12.Nov.2018) — YPF announced that combined equivalent production fell 4.3% in the third quarter of 2018.

Total production fell to 529.1 Mboe/d in 3Q:18 compared to 553.2 Mboe/d in 3Q:17, and driven mainly by a decline in NGL production and natural gas demand restrictions, the company announced during its quarterly call with investors and analyst.

Year-over-year, production of NGLs was down 44.6%, natural gas production was down 1%, while crude oil production was up a slight 0.1%, the company said.

Looking forward, YPF announced its year-end 2018 production guidance has been revised to negative 3-4% compared to negative 2% earlier.

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Argentina Initiates U.S. ‘Vaca Muerta’ Road Show

(Energy Analytics Institute, Aaron Simonsky, 12.Nov.2018) — Officials from Argentina initiated a road show today in the U.S. aimed at attracting investments in the Vaca Muerta formation in Neuquen.

Argentina’s Energy Secretary Javier Iguacel, along with officials and representatives from more than 30 oil companies, plan to participate in the investor road show that will take them to several cities in the U.S., reported online media Vaca Muerta News.

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Argentina Awaits Hydrocarbon Investments Of Nearly $13 Billion in 2019

(Energy Analytics Institute, Aaron Simonsky, 8.Nov.2018) — Argentine hydrocarbon investments are projected to increase in 2019 compared to 2018, announced the country’s Energy Secretary Javier Iguacel.

“This year they invested $9 billion in oil and gas. Next year we expect investments of $13 billion and double the amount of equipment that is drilling,” Argentina’s Treasury reported in an official statement, citing comments made by Iguacel during his participation at the meeting ‘Energy in Argentina,’ which was organized by the Ministry of Foreign Affairs and held at Palace San Martín.

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Argentina Aims To Cover 20% Of Energy Demand in 2025 With Renewables

(Energy Analytics Institute, Aaron Simonsky, 8.Nov.2018) — Argentina’s shale boom taking place in the Vaca Muerta formation in Neuquen will not stop the country from pursuing goals related to renewable energies.

“We set out to promote renewable energies and assume a very specific commitment,” Argentina’s Treasury reported in an official statement, citing Argentine President Mauricio Macri during a visit on Nov. 7 to a plant run by Newsan.

“By 2025 [our aim is that] 20% of electricity demand will be covered by renewable energies,” said Macri.

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YPF To Invest $5 Billion Per Year During 2019-2023

(Energy Analytics Institute, Jared Yamin, 4.Nov.2018) — YPF expects to make investments of $5 billion per year during the 2019-2023 period as part of its initiative to be a leader in the production of energy in Argentina.

As a result, YPF’s hydrocarbon production is expected to grow between 5% and 7% per year, the company announced in an official statement on its website.

“YPF plans to focus on cost improvement and operational excellence, while seeking to efficiently manage the decline of conventional deposits and accelerate the development of the unconventional,” the company announced.

YPF has already begun to apply conventional technologies related to secondary and tertiary recovery at mature reservoirs with good results in pilot projects in the Neuquén basin and the San Jorge Gulf, the statement said.

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Argentina Restarts Natural Gas Exports To Chile

(Reuters, Dave Sherwood, 30.Oct.2018) —  Argentina has begun exporting natural gas to Chile after a 12 year interlude, Chilean President Sebastian Pinera said on Tuesday, as the two South American neighbors seek to increasingly integrate their energy supply and electricity grids.

The unconventional gas is being piped from Argentina’s oil- and gas-rich Vaca Muerta shale field in the Neuquen basin, then sent over the Andes mountain range to Chile’s southern province of Biobio.

“We are working enthusiastically with (Argentine) President Mauricio Macri to integrate our energy supply,” Pinera said in a speech.

The exports mark a turning point in energy trade in the region. Argentina, which sits atop the world’s No. 2 shale gas reserves, was once a major supplier of natural gas to Chile, but triggered a diplomatic crisis in the mid-2000s by cutting off shipments when its own supplies ran low.

The move sent Chile, a global mining powerhouse that has few hydrocarbons of its own, scrambling to find new sources of supply. The spat also helped foster a move towards alternative energy sources like wind and solar in Chile.

Pinera said the two countries had very different, but often complementary, energy needs, and that depending on the time of year and circumstance, could either export or import fuel and electricity across their shared border.

“This will permit us to back one another up without having to spend excess money to do so,” he said.

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Añelo Population Growth Part Of Region’s Shale Boom

(Energy Analytics Institute, Ian Silverman, 20.Oct.2018) — Añelo’s population is expected to reach 25,000 by 2023 compared to nearly 8,000 today and just 2,000 in 2011, reported the media outlet Río Negro.

“80% of the city has basic services such as water, electricity, gas and sewage,” reported the daily, citing Deliberative Council President Milton Morales.

In October 2018, the city will inaugurate its first level 3 hospital with assistance from the YPF Foundation and Chevron’s Baylor Foundation.

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Argentina To Reduce Bolivian Gas Imports To Minimum

(Energy Analytics Institute, Jared Yamin, 20.Oct.2018) — Argentina will likely reduce its demand for Bolivian natural gas imports to a minimum, says an oil analyst.

Argentina, which continues to boost production of its unconventional shale gas resources located in the Vaca Muerta formation in the Neuquen region, will likely reduce its demand for natural gas imports from Bolivia to a minimum 23.5 million cubic meters per day (MMcm/d), reported the daily newspaper El Diario, citing Jubilee Foundation Oil Analyst Raul Velásquez.

The analyst made the comments after declarations from Argentina’s Energy Secretary Javier Iguacel that revealed that in two years the country would no longer need to import gas from Bolivia.

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YPF Personnel Try To Mitigate Gas Leak In Bandurria

(Energy Analytics Institute, Ian Silverman, 19.Oct.2018) — YPF personnel conducted operations today to mitigate a gas leak located at the Bandurria deposit in Neuquén.

No injuries were reported, and the location was evacuated for security reasons to initial contingency work, reported the media outlet Río Negro.

YPF didn’t reveal details about the incident.

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Argentina Looks to Cease Bolivian Gas Imports By 2020

(Energy Analytics Institute, Jared Yamin, 16.Oct.2018) — With its own gas projects to develop, Argentina is seeking to reduce imports of natural gas and by 2020 it expects to stop buying it completely from Bolivia.

In the run up period, Argentina looks to reduce Bolivian gas imports by 20% in 2018, by 50% in 2019, and by 2020 they would no longer be necessary, reported Bolivian media La Razon, citing Argentina’s Energy Secretary Javier Iguacel.

The plan announced by the Argentine official is based on three current massive developments and four other promised in the Vaca Muerta formation, which spans four provinces: Neuquén, Río Negro, La Pampa and Mendoza.

Currently, the Neuquén Basin produces almost 70 million cubic meters of gas per day (MMcm/d) and Argentina expects to boost production in the basin to nearly 90 MMcm/d with additional investments.

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Bolivia’s Gas Lower than LNG, Vaca Muerta Shale: Sánchez Says

(Energy Analytics Institute, Jared Yamin, 12.Oct.2018) — Bolivian natural gas is more competitive than liquefied natural gas (LNG) and gas from Argentina’s Vaca Muerta shale formation, announced Bolivia’s Hydrocarbon Minister Luis Alberto Sánchez.

The minister stressed that Bolivian gas, priced at $7/MMbtu, was much cheaper than Argentine gas.

Argentina’s LNG imports cost around $10.50/MMbtu, while the production cost in Vaca Muerta is around $7.50/MMbtu, so “the most competitive gas for the Argentine market is undoubtedly Bolivian gas,” reported the daily newspaper El Diario, citing Sánchez.

Sánchez warned that if Argentina decides to pay a lower price (reduces the price), it must pay the Take or Pay (contract modality), which establishes a fine be paid for any energy not withdrawn, plus interest.

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Añelo: The Two Realities of this Small Town in the Heart of Neuquen

(Energy Analytics Institute, Jared Yamin, 10.Oct.2018) — Añelo is a small oil town located in the heart of Neuquen and the Vaca Muerta shale revolution. This small town with a population of almost 8,000 is expected to swell to tremendously in coming years as the shale boom picks up speed, says Jorge Lanata of Argentina’s El Trece TV during his tour of Añelo back in 2014.

https://youtu.be/L05if9Rs2wM

 

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Argentina’s Vaca Muerta Looks to Attract $7 Bln in Investments in 2019

(Energy Analytics Institute, Jared Yamin, 6.Oct.2018) — Investors could inject $7 billion into the Vaca Muerta in 2019, announced Neuquén Governor, Omar Gutiérrez.

“In 2019, we will have 15 new drilling rigs conducting unconventional activity and reach an investment record with $7 billion,” reported the Argentine daily newspaper Clarin, citing comments from the official made during the International Oil & Gas Exhibition in the capital of Neuquén. “Each team requires a workforce of 200 people, therefore we will be generating 3,000 new jobs,” he add.

According to projections for next year, new extraction numbers could also be established.

In 2019, Argentina’s natural gas production is expected to reach 90 million cubic meters per day (MMcm/d), while crude oil production is expected to reach 140 thousand barrels per day (Mb/d). This compares to current Neuquén production of 68.6 MMcm/d and 113 Mb/d, the daily reported, without citing its sources.

The Neuquén basin generates 50% of Argentina’s gas, of which 61% of this figure currently comes from the Vaca Muerta, according to the daily. Additionally, 50% of the oil produced in Neuquén is also extracted from Vaca Muerta.

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Argentina: The Energy Challenge

(YPF, 1.Oct.2018) — Argentina’s unconventional oil & gas resources are among the world’s largest. YPF is working and investing to increase production with the aim of meeting the challenge of regaining energy self-sufficiency.

The importance of hydrocarbons

Energy is the basis of our society and our way of life. We depend on it for food production, transportation, heating, electricity, lighting, telecommunications and technology.

The economic development of the country depends on the availability of oil and gas, the main sources of energy which do not only generate electricity.

90% of the objects we use every day are derived from petroleum products. Petroleum is also essential for producing bottles, bags, cell phones, watches, clothing, paint, detergents, fertilizers, toothpaste, hair conditioner and much more.

Moreover, in Argentina, 1,800 million liters of diesel are used to produce 100 million tons of grain annually.

It is estimated that by 2040 renewable energies will occupy nearly 15% of the world’s energy matrix. However energy from fossil fuels will continue to occupy a high percentage of more than 80%.

Resources to regain self-sufficiency

Due to the natural decline of conventional hydrocarbon reserves and a sustained increase in demand for fuel and the thousands of products derived from it, in addition to alternative energies it is also necessary to explore and add new resources. Shale is a sedimentary formation with low permeability which contains unconventional hydrocarbons housed in the micropores of the rock. To extract oil and gas from this rock conventional perforations are performed similar to those used in Argentina over the past 70 years, and with the addition of a next-generation technology known as hydraulic stimulation. The highest safety standards are applied in this technique and this ensures both efficiency and environmental care.
Our country has an enormous worldwide potential to obtain large hydrocarbon reserves from unconventional resources.

Vaca Muerta

It is a geological formation of 30,000 km² (12,000 km² in concession to YPF) located mainly in the province of Neuquén and containing oil and gas found at a depth of more than 2,500 meters, far from the groundwater that in this region is located at a depth of between 300 and 400 meters.

The relevance of Vaca Muerta is so significant that the development of only a small part of this formation could cover the country’s energy deficit.

Read he full story online here.

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Neuquen Gas Production Reaches 69.8 MMcm/d in August 2018

(Energy Analytics Institute, Jared Yamin, 27.Sep.2018) — Crude oil and natural gas production from the Neuquen Basin rose sequentially in August 2018.

Oil production reached 120,551 barrels per day (b/d) in August 2018, up 6.64% compared to July 2018, and up 16.9% compared to August 2017, while gas production reached 69.8 million cubic meters per day (MMcm/d), up 2.48% sequentially, and up 13.3% year-over-year.

A large part of this growth was due to three massive developments carried out in the unconventional area, the Government of the Neuquén Province reported in an official statement on its website

Of this total, Vaca Muerta today produces 65,186 b/d of oil (54% of what the Neuquen basin produces) and 43.2 MMcm/d of gas (62% of what the Neuquen basin produces). Of this last figure, 30% corresponds to shale gas (20.5 MMcm/d) and 32% to tight gas (22.6 MMcm/d).

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Unlocking the Potential of Argentina’s Oil and Gas Resources

(Chevron, Clay Neff, 23.Sep.2018) — ‘A stable and predictable business environment is essential to draw the investment capital needed,’ says Chevron Africa and Latin America Exploration and Production Company President Clay Neff.

Argentina is one of the few nations outside North America that has the potential to replicate its neighbour’s shale revolution.

The unconventional oil and gas resources in Argentina’s Vaca Muerta shale formation are world class. As such, their level of productivity can compete with any of the shale formations at the centre of the US oil and gas boom — and that includes the prime US area of the Permian basin in Texas.

The Argentine government has taken important steps toward creating an environment that encourages investment in Vaca Muerta.

We at Chevron believe that, if the right conditions continue, this large resource will bring additional investment, continued employment and economic growth to the country while helping to meet the growing global demand for affordable, reliable energy.

Vaca Muerta’s current production of about 160,000 barrels of oil equivalent a day could grow to almost 900,000 boe/d by 2024 if the country can attract $4bn of investment a year, according to consultancy Wood Mackenzie.

A stable and predictable business environment is essential to draw the investment capital needed to ensure Vaca Muerta reaches its potential. A key task for industry executives is to analyse how a country’s risk-reward calculus matches up against others competing for investment. It will be particularly important for Argentina’s government to adhere to free market principles.

Reducing drilling and production costs by increasing efficiencies is also important to attract more investment to Vaca Muerta. A key reason the shale revolution has seen such success in the US in the past few years is that companies have become highly efficient in their operations through process improvements and new technologies.

In partnership with Argentina’s national oil company, YPF, Chevron has made great strides in improving hydrocarbon recovery and lowering drilling costs at our Loma Campana joint venture in the Vaca Muerta shale. Horizontal wells and advanced completion techniques are leading to recoveries competitive with areas of the Permian basin.

Last year, our unit development cost, the cost per barrel, decreased 25 per cent compared with 2016. Furthermore, we expect costs to go even lower and close to the levels seen in areas such as Permian’s Midland basin.

Sustaining lower production costs will require better infrastructure. The Neuquén basin, where Vaca Muerta is located, has enough infrastructure to support the production levels of old as far as conventional oil and gas resources are concerned. However, more is required to achieve the large-scale development that will fulfil its much greater potential.

Significant steps in the right direction have been taken with the planned construction of new railroads and pipelines. But more is needed to ensure the area is internationally competitive.

Chevron, one of the largest foreign investors in the Vaca Muerta shale, continues to do its share to advance the development of this resource. In partnership with YPF, we have increased drilling from two to three rigs at our Loma Campana project. We are seeing continued improvement in performance thanks in part to the use of best practices from unconventional oil and gas areas in the US.

We are also looking at the Vaca Muerta shale in other parts of the Neuquén basin. In our El Trapial field, for example, we will be executing an eight-well appraisal programme to assess the potential of its unconventional reserves.

Argentina is on the right path to make the large-scale development of Vaca Muerta a reality. The responsible development of the extensive unconventional oil and natural gas resources has the potential to be an once-in-a-lifetime economic engine for the country.

Clay Neff is the president of Chevron Africa and Latin America Exploration and Production Company

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Excelerate Energy, TGS Sign Deal to Study Liquefaction Project in Bahía Blanca

(Excelerate Energy L.P., 10.Sep.2018) — Excelerate Energy L.P. and Transportadora de Gas del Sur S.A. announced the execution of a Memorandum of Understanding to jointly collaborate on the assessment of a liquefaction project in the city of Bahía Blanca, Argentina. Argentina currently imports liquefied natural gas (LNG) through two floating import terminals, particularly during the country’s peak winter consumption. The successful development of Argentina’s shale gas reserves resulted in a potential excess of natural gas during the summer months. The project aims at studying the technical and commercial viability of liquefying and exporting natural gas during the summer season, allowing a more sustainable development of shale gas resources and reducing Argentina’s annual natural gas net import needs. The study is expected to be completed by the end of 2018, at which time Excelerate and TGS will share the results with government and industry officials and decide on further actions towards the implementation of the Project.

“Given the high seasonality of Argentina’s natural gas consumption, LNG has played a critical role in meeting the country’s energy demands,” stated Excelerate’s Chief Commercial Officer Daniel Bustos. “This Project will significantly enhance Argentina’s capacity to maximize the use of local resources by allowing a more predictable development of shale gas production while reducing the overall costs of importing LNG.”

TGS is carrying out an important midstream project aimed at the transportation and conditioning of the natural gas production derived from the Vaca Muerta Basin, located in the province of Neuquén, Argentina. This Project represents an essential contribution to the development of shale gas reserves, promoted by the National and Provincial Governments, as it will ensure the infrastructure required to inject incremental gas production to the main transportation systems.

“Carrying out LNG production through the Project will be key to promote the development of unconventional gas, since it will allow to expand the scale of the gas market, increasing export opportunities, after having met domestic market needs in Argentina,” stated TGS’ Chief Commercial Officer Néstor Martín.

Both Excelerate and TGS have been critical players in the growth of the Argentine energy industry. Currently, one hundred percent of LNG imported and regasified into the country is through Excelerate’s two floating storage and regasification units (FSRUs). Excelerate developed South America’s first LNG import terminal in 2008 in Bahía Blanca, following with the second terminal in 2011 in Escobar, Argentina. TGS is the leading natural gas transportation company in Argentina and owns and operates South America’s largest pipeline network. The project underscores both party’s commitment to seeing Argentina’s energy sector become more sustainable for the long term.

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Argentina: Exploration And Production Snapshots

(Deloitte, 31.Aug.2018) — In the wake of a decade-long slump in Argentina’s oil and gas industry, the country is now well positioned to resurrect international investment and exploit its world-class resources to their full potential. With the support of a new pro-business government and the discovery of massive shale potential in the Vaca Muerta basin, the road to revitalizing Argentina’s natural gas-based economy is clear: attract skilled workers, upgrade its infrastructure, and adopt new technologies to spark the first shale revolution outside of North America.

Read the full report here by Deloitte.

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Pampa Reaches 35-Year Deal in Sierra Chata Block

(Pampa Energía S.A., 10.Jul.2018) – Pampa Energía S.A. announced an Investment Agreement was executed with the Neuquén province, which will grant a new 35-year concession for unconventional hydrocarbon exploitation at the Sierra Chata block (the ‘Block’), aiming at the development of unconventional shale and tight gas in the Vaca Muerta and the Mulichinco formations, respectively.

The Block is located 93 miles northwest of Neuquén city and accounts an area of 213 thousand acres. Currently, the Block produces natural gas from the Mulichinco formation (compact sands or tight gas), with 69 productive wells and 45 million cubic feet of daily net production. Pampa is the operator of the Block and holds 45.6% stake, jointly with Mobil Argentina S.A. and Total Austral S.A. Argentina Branch, with a participation of 51.0% and 3.4%, respectively (the ‘Consortium’).

In consideration for obtaining the new concession, the Consortium committed to make an investment in the Block for an amount of $520 million during the next 5 years (of which Pampa will contribute the corresponding amount according to its share participation), with the objective to continue developing the Mulichinco formation and explore the potential of the Vaca Muerta formation. Moreover, the Consortium disbursed an exploitation bond and a contribution to corporate social responsibility for US$30 million.

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Pampa Reaches 35-Year Extension in El Mangrullo Block

(Pampa Energía S.A., 5.Jun.2018) – Pampa Energía S.A. was granted a 35-year period extension to the operation of the El Mangrullo block for the development of unconventional gas (shale and tight), within the new exploitation license that Neuquén province granted to the Cutral Có and Plaza Huincul Inter-city Autonomous Body (‘ENIM’), which will come into force with the corresponding Provincial Order.

Currently, the El Mangrullo block is 100% developed by Pampa, is located in the mid-east of Neuquén province and accounts an area of 35,830 acres. Pampa produces natural gas from Mulichinco formation (compact sands or tight gas), with 41 productive wells and 97 million cubic feet per day. In consideration for the operation’s period extension, Pampa committed to disburse $205 million for a pilot investment plan during the next 5 years, with the objective to continue developing Mulichinco formation by drilling 15 wells, in addition to 1 well targeting Tordillo formation and explore the potential of Vaca Muerta formation (shale gas), by drilling 3 additional horizontal wells. Moreover, Pampa paid an exploitation bond and a contribution to corporate social responsibility that amounts to US$15.4 million.

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TGS to Invest $250 Mln in Infrastructure to Transport Vaca Muerta Gas Production

(Transportadora de Gas del Sur S.A., 3.Apr.2018) — Transportadora de Gas del Sur S.A. (TGS) executed an agreed minute with the Undersecretary of Energy, Mining and Hydrocarbons of the Province of Neuquén and Gas y Petróleo del Neuquén S.A. (GyP), whereby TGS is granted a concession to build and operate a gathering pipeline which will cross a number of fields in the Vaca Muerta formation; in addition, TGS will build and operate a conditioning plant.

It should be pointed out execution of the agreemend is subject to approval by the Provincial Executive Branch, through the issuance of the corresponding Provincial Decree in the Official Gazette of the Province of Neuquén; as from which date it will come into effect. In addition, to make the project feasible, TGS entered into natural gas transportation and conditioning agreements with certain natural gas producers.

The gathering pipeline, which will connect the Rincón La Ceniza area to the main transportation systems, will have a transportation capacity of 1.3 billion of cubic feet per day (Bcf/d) -expandable to 2.0 Bcf/d-, a length of 57 miles, a 36” diameter and will operate at a 97 Kg/cm2 pressure.

The conditioning plant, which will adapt the quality of the natural gas before it enters the main natural gas transportation pipelines, will have an initial capacity of 177 million cubic feet per day (MMcf/d), expandable in modules up to 2.0 Bcf/d.

The amount of the investment related to the project’s first stage amounts to $250 million and its execution will be implemented throughout the rest of the year 2018 and during part of the year 2019.

The project represents an essential contribution to the development of the Vaca Muerta hydrocarbon formation, and both the National Government and that of the Province of Neuquén are highly interested in it, as it will provide the infrastructure required for the incremental natural gas production to enter the main natural gas transportation systems. For TGS, the development of the project underscores its interest in the Argentine energy industry growth.

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Argentina to Develop Tight Shale Oil, Gas

(OGJ, Nick Snow, 27.Mar.2018) — With the largest shale gas resources and tight oil deposits second only to those of the US in the Western Hemisphere, Argentina is trying to attract more foreign investments by continuing to improve government policies, speakers said during a Mar. 27 discussion at the Inter-American Dialogue. But the South American nation faces substantive challenges as it tries to make operating conditions there more transparent and predictable, they added.

“Our general economy has grown for seven consecutive quarters, and poverty is going down,” said Fernando Oris de Rosa, Argentina’s ambassador to the US. “Foreign direct investment grew to $10.7 billion in 2017, and we’d like more. Fiscal and tax reforms have been passed, and discussions with organized labor are planned. Ultimately, we want to move from populism to transparent, realistic policies which become permanent.”

More reforms need to move from transitions to permanence, said Omar Gutierrez, governor of Neuquen province where most of the tight oil and gas supplies are in the Vaca Muerta formation.

“We eliminated gas and oil retentions and installed a pricing regime that has encouraged development. We also have done away with consumption subsidies and allowed prices to rise. With drilling costs half of what they were, unconventional oil and gas now has a greater share of our province’s total production, and 20-22% of Argentina’s,” he said.

Argentina has become the only Latin American country on a par with the US due to the alignment of its government at several levels with all the stakeholders, said Paolo Carvajal, a consulting member at international management services firm Arthur D. Little’s Houston office. “Today, we can talk about a 50% gain in efficiency per square foot there. Multinationals like ExxonMobil, Chevron, and Shell are there along with YPF, the national oil company,” she said.

“We expect that in 2025, Argentina’s oil and gas production will have tripled. But it will need to overcome challenges, including infrastructure, investment climate stability, unions, developing qualified human resources and an oil services sector, and smoothly adopting natural gas market prices,” Carvajal said.

From pilots to development

Gutierrez noted that of Argentina’s 26 tight shale oil and gas concessions, three are being developed now and three to four more are expected to get under way soon. “We have a plan all the actors are monitoring and are involved in. Tonight, I will be in Houston for an event where I expect to discuss this in more detail. We’ve seen capital from many sources and expect to see more projects move from the pilot to the development phase,” he noted.

“We want to make our energy prices competitive so the rest of the country’s economy can follow,” said Gutierrez. “We also have begun to export gas to Chile, with generally good results. Vaca Muerta will give us an efficient energy hub which will drive our national economy.”

Carvajal said, “Argentina has been fortunate because it has been able to develop unconventional resources without as much local and labor opposition as in other Latin American countries. But local issues will need to be addressed. This alignment has let Argentina lead the unconventional resources charge in Latin America. But investments will be needed in other sectors as well.”

Full stakeholder participation is essential, Gutierrez said. “We have a comprehensive plan with dynamic properties. Companies also have shared what they have learned. This has led to a constructive dialogue where all the actors are contributing,” he said.

Carvajal said Argentina President Mauricio Marci’s government has enacted several good reforms, but oil and gas multinationals have long memories and face equally long waits before prospects being producing. “We’re talking about production that would begin 35 years in the future, so the situation could change,” she suggested.

Gutierrez thinks that this looks increasingly less likely. “The government is one of four main actors. It is putting many ideas forward, but everyone else is participating too,” he said. “We’ve done a lot in 3 years. Vaca Muerta has shown what can be done. There is not a single negative result in the pilot programs so the companies will continue to invest. We also are about to announce plans for a huge new gas pipeline so companies will be able to move what they produce to their customers.”

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Vaca Muerta Megaproject – A Fracking Carbon Bomb In Patagonia

(Observatorio Petrolero Sur, 5.Feb.2018) — Vaca Muerta is a leading case for the next generation of fossil fuels. Big Oil and Gas companies are keen to turn it into a success story —which is why we collectively need to put a stop to this if we are serious about restricting oil and gas supply globally, protecting territories and fighting climate change. It is our view that “Killing the Dead Cow”—and thus preventing a further expansion of the fossil fuel industry that would be a door-opener for further projects in the Global South— is necessary to build up pressure for an honest dialogue about “managed decline” and fair transition. The collective success of movements in an emblematic case like this would increase leverage for such a conversation.

Briefing: Vaca Muerta shale play – climate impacts, wealth concentration and human rights abuses.

Argentina ranks in second and fourth place globally in shale gas and shale oil resources. Almost all of this potential is concentrated in “Vaca Muerta” (“Dead Cow”), which has been identified as the biggest shale play outside North America and makes Argentina the third country, after the United States, and Canada, to reach commercial development. Vaca Muerta is presented as a test case for the Global South, and especially for the Latin American region, where several governments are proposing new unconventional projects.

Total estimated resources amount to 19.9 billion barrels of oil and 583 trillion cubic feet of gas. They represent around 50 billion tons of CO2 that are currently locked in the ground which can only be extracted with hydraulic fracturing (or fracking), a highly controversial technique which has been banned in several countries or sub-national entities.

Although it is still at an early stage of development (2 to 4%, 1,500 fracking wells), almost every oil major is present in the region. Ventures include YPF, Chevron, Total, Dow Petrochemical, Petronas, Schlumberger, Shell, Pan American Energy (BP, CNOOC, and Bridas), Wintershall, Statoil, Gazprom, and ExxonMobil.

International involvement is crucial for funding (estimated at tens of billions of dollars), capacity building and governance. Other involved actors include U.S. Department of State, World Bank, Inter-American Development Bank, Citibank, ICBC, and Deutsche Bank.

Regulation and policy enforcement is scarce. Its early development is currently infringing on a range of individual and collective human rights in working-class neighborhoods, indigenous communities, agriculture regions, and protected areas. Fracking is an experimental technique so various accidents have been recorded: radioactive pills have been lost in wells, wells have gone up in flames due to gas leaks, truck accidents have caused spills, pipelines have broken, and five workers lost their lives, among other incidents. Social impacts are also exacerbated.

Vaca Muerta is a complex, multidimensional and global issue. It seems unstoppable, but the venture has shown great structural intrinsic fragility and its real potential has been overhyped. On top of that, its scope and speed have also been reduced by networks of national and international resistance. Across the country, numerous bans on fracking and infrastructure projects have been obtained.

Download the project brief here

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Tecpetrol to Invest $2.3 Bln in Vaca Muerta

(Reuters, Eliana Raszewski, 23.Mar.2017) — Argentina’s Tecpetrol, part of the Techint Group, said on Thursday it would invest $2.3 billion in the Vaca Muerta shale fields through 2019, the largest announcement in the formation in years.

Tecpetrol said in a statement the investment was made possibly due to measures from President Mauricio Macri’s government, including a deal with labor unions earlier this year and a definition of price supports this month.

Tecpetrol will aim to produce an average 14 million cubic meters (494 cubic feet) of shale gas per day by 2019 said Guillermo Pereyra, a union leader and senator who participated in a Thursday meeting where executives communicated the plan to Macri.

That is half the amount of gas Argentina currently imports, Pereyra said, and will help Macri’s government reach its goal of energy self efficiency. An energy deficit is a major contributor to Argentina’s fiscal deficit.

About the size of Belgium, the Vaca Muerta formation is one of the largest shale reserves in the world but it has been mostly unexplored due to high production costs and lack of labor flexibility.

The investment would eventually result in 1,000 new jobs, Pereyra and Tecpetrol said.

“We are going to arrive in September with five or six drilling teams, each one with about 100 people, this is very important,” Pereyra said in a telephone interview.

Macri’s government in January announced an agreement with oil companies and unions to lower labor costs and stimulate investments, which until now have been slow to arrive.

YPF said it reached a preliminary deal with Royal Dutch Shell Plc last month to develop oil and gas assets in Vaca Muerta involving a $300 million investment from Shell.

Earlier this month the government said it would gradually lower the price it guarantees for gas drilled from new wells, currently $7.50 per million British thermal units of gas, to encourage investment sooner rather than later.

Vaca Muerta contains 308 trillion cubic feet of shale gas and 16.2 billion barrels of shale oil, according to the U.S. Energy Information Administration.

Tecpetrol has been carrying out a pilot project in the Fortin de Piedra area and will now move on to the development phase, Pereyra said.

The company said it planned to drill 150 wells in the next three years, with $1.6 billion of the investment going toward the wells and $700 million to be used for treatment and gas transport installations, Tecpetrol said.

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Big Oil Flocks To Argentina As Permian Land Prices Skyrocket

(Oilprice.com, Charles Kennedy, 15.Sep.2016) — The Permian Basin has become so hot that some oil companies are starting to stay away, instead looking at frontiers that are less picked over.

BP is one such company. The British oil giant’s CEO Bob Dudley said that land in the Permian has become too expensive, and instead he is looking to expand operations in Argentina, where the vast Vaca Muerta shale basin offers appetizing opportunity.

In an interview with Bloomberg TV from Buenos Aires, Dudley said BP is planning on acquiring more assets in the Vaca Muerta. And it isn’t just the “enormous potential” from the oil and gas reserves in the shale basin, but also the friendly policy put forth by the new Argentine government led by President Mauricio Macri. “I’m really encouraged by what I see,” Dudley said. “There’s a lot of future here.” BP has a joint venture with Bridas Corp. – BP owns 60 percent of Pan American Energy LLC and Bridas controls the other 40 percent. BP will expand its presence in Argentina through this JV.

Argentina is quickly becoming one of the few countries that has achieved shale development outside of North America. One of the biggest incentives the government has offered is regulated oil prices, set at levels higher than the international price. Several of BP’s peers are already drilling in the Vaca Muerta, including Chevron, ExxonMobil, and Royal Dutch Shell.

The state-owned YPF said that it would need investments totaling about $200 billion to fully exploit the Vaca Muerta.

Exxon said earlier this year that it might spend more than $10 billion in Argentina, building on several pilot projects. The investments would span decades. “I am very encouraged by the changes that have occurred here in Argentina, with the change in government,” Exxon’s CEO Rex Tillerson said in June. More and more companies are starting to build up their presence in Argentina.

Meanwhile, back in Texas, land prices are shooting through the roof. SM Energy recently spent more than $39,000 per acre for land in the Permian, which some are calling the “hottest zip codes in the industry.” That is pricing out some companies and forcing many to look elsewhere. With West Texas saturated with drillers, Argentina stands to benefit.

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Energy Analytics Institute (EAI): #LatAmNRG

Executive Profile: YPF New CEO Ricardo Darré

(Energy Analytics Institute, Jared Yamin, 6.Jun.2016) – Ricardo Darré will assume the position of CEO at YPF on July 1, 2016, taking over the helm from the interim CEO.

Darré graduated from the Buenos Aires Technology Institute (ITBA by its Spanish acronym) with a specialization in mechanical and industrial engineering, reported the daily newspaper La Nacion.

After finishing university he worked for Schlumberger in Angola, Zaire in the Neuquén basin.

In 1987, he began work with Total, where he has worked until now. With Total he worked in Tierra del Fuego, France and Thailand in various roles related to offshore exploration.

From 1998, he started to assume roles related to operations in Norway, Russia, the United Kingdom, France and the United States.

Currently, he continues to work as managing director of Exploration and Production with Total in Houston, Texas.

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ExxonMobil to Invest $10 Bln in Vaca Muerta

(Energy Analytics Institute, Jared Yamin, 3.Jun.2016) – U.S.-based ExxonMobil plans to invest $10 billion over the next 20 years in the Vaca Muerta area in Argentina.

The announcement was made by ExxonMobil President Rex Tillerson during a visit the Vaca Muerta area in Neuquén with Argentine President Mauricio Macri, reported the daily newspaper iEco. Exxon has already spent $200 million on exploration drilling activities in the area.

“Depending on the success of the program, we will determine if it is possible to advance with the complete development of the project,” said Tillerson.

ExxonMobil Exploration Argentina — together with XTO Energy in association with Gas y Petróleo from the Neuquén region — plans to start a pilot project in the Bajo del Choique-La Invernada area. The project could commence in coming months with an estimated investment of nearly $250 million.

“I am very optimistic with the changes that have taken place here in Argentina with the new government. Clearly the investment climate is improving as well as the functioning of foreign trade,” said Tillerson who added that Argentina was an important area for his company.

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Saesa Says 15 Wind Projects Ready For Construction

(Energy Analytics Institute, Jared Yamin, 31.May.2016) – Energy company Saesa announced that at least 15 wind park projects are ready to be built in Argentina, which represents nearly 900 megawatts of energy.

There are also another 17 projects in the advanced approval stages, which have potential to add 1,000 megawatts of energy, reported the daily newspaper La Nacion.

The most advanced projects are located in Buenos Aires, Chubut, Córdoba, La Pampa, La Rioja, Neuquén and Santa Cruz. There are nearly 70 wind projects that have been announced that have potential to add close to 7,000 megawatts of energy, reported the daily.

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Approval of Sale of Petrobras Argentina

(Petrobras, 13.May.2016) – Petrobras announced that its Board of Directors approved the sale of its entire 67.19 percent interest in Petrobras Argentina (PESA), owned by Petrobras Participaciones S.L. (PPSL), to Pampa Energía.

The transaction base price is $892 million, equivalent to the value of $1,327 million for 100 percent of PESA. The transaction also included an agreement for subsequent transactions to acquire 33.6 percent of the concession of Rio Neuquen, Argentina, and 100 percent of Colpa Caranda asset in Bolivia for a total amount of $52 million.

The Rio Neuquen and Colpa Caranda assets have strategic value for Petrobras since they represent good potential for natural gas production in the Neuquén Basin, where Petrobras estimates to have large unconventional natural gas reserves (tight gas). It is noteworthy that the subsequent transactions relating to these assets are subject to approval by the appropriate deliberating bodies of PESA and the relevant regulatory agencies.

The completion of the transaction is subject to certain typical conditions, including the approval by the relevant regulatory agencies.

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YPF Announces Plans for 20 Areas in Río Negro, Chubut

(Energy Analytics Institute, Jared Yamin, 7.May.2016) – YPF plans to divest of as many as 20 areas in Argentina where the company has a partial interest or where the areas do not offer important earnings.

YPF has put up on the market 6 areas in Río Negro, including some with good returns, reported the daily newspaper iEco.

In Chubut, the company has already identified 20 areas it plans to divest, according to the daily. The company plans to follow a similar strategy in Neuquén and Santa Cruz, although details about these areas have yet to be revealed publicly.

In Neuquén in the Vaca Muerta there are plans in discussion regarding 20 rigs. According to industry data, activities in the area are estimated to fall by 30 percent and by as much as 50 percent in the reservoir exploited by YPF and Chevron.

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