Related Articles
Forward article link
Share PDF with colleagues

Repsol hopeful of new Argentine shale find

Subsidiary YPF makes potentially similar discovery north of the Vaca Muerta

Repsol could be on the verge of another unconventional find in Argentina to match the recent Vaca Muerta shale discovery – which has revolutionised prospects for the company and the country’s energy sector.

Tomás García Blanco, executive director, upstream of YPF – Repsol’s local subsidiary – told the Financial Times that a 502 square km exploration area just to the north of the Vaca Muerta discovery, announced last month, could yield similar results.

In November, the company found an estimated 927 million barrels of oil equivalent (boe) of recoverable resources – 80% oil – across a 428 square km section of its 12,000 square km Loma La Lata Norte concession in the Neuquén basin. The Vaca Muerta find nearly doubles Repsol’s total reserves base and adds 40% to Argentina’s oil resources.

Blanco said that the two wells in production on the new acreage, in its Bajada de Añelo and Bandurria exploration areas, are producing “exactly the same” yield as the find further south and that they could signal another discovery of near 1 billion barrels. “But until the third well is drilled,” he added, “I would like to be cautious. We hope to know by the end of the year or January 2012.”

Blanco said the firm’s estimates were based on an ability to extract 4% of all available hydrocarbons – a recovery rate that some shale producers believe could increase with technological advances in the future.

Speaking at last week’s World Petroleum Congress in Qatar, Repsol chief executive Antonio Brufau said it could cost around $30 a barrel to explore and develop the first Vaca Muerta shale discovery.

In December 2010, YPF, which is 57% owned by Repsol, found around 4.5 trillion cubic feet (cf) of unconventional gas in another part of the Neuquén basin, which lies in the west of the country.

These unconventional oil and gas discoveries could pave the way for Argentina – a net exporter of conventional oil, despite declining production – to become one of the world’s largest oil producers in the future, as well as boosting its gas prospects.

Repsol plans to look beyond Vaca Muerta. Next year, it expects to spend $40 million drilling the Molles formation, which lies beneath the Vaca Muerta shale at a depth of 3,500-4,000 metres, as well as looking at shale potential in the San Jorge basin, to the south.

Other firms are also ramping up unconventional drilling programmes. Earlier this month, Americas Petrogas spudded the first well in its Los Toldos blocks drilled under a farm-in agreement with ExxonMobil in the Vaca Muerta shale.

Argentina could hold around 774 trillion cf of technically recoverable shale-gas resources, or around 12% of the world total, with more than half of them in the Neuquén basin, says the US Energy Information Administration. That compares with the country’s proved conventional reserves of just over 13 trillion cf at end-2010.

The Argentine government has been increasingly supportive of oil and gas developments, following several years when big discoveries dried up as the country struggled to recover from a period of political and economic instability that left the energy sector short of investment.

A less volatile political scene and the introduction of programmes known as Gas Plus and Oil Plus in 2008, designed to incentivise exploration through higher wellhead prices, now appear to be paying dividends, as Total, ExxonMobil, Petrobras, Chevron and others beef up their presence in the country.

Also in this section
Rosneft strikes again in the Arctic
13 August 2020
The Russian oil firm has added more reserves to its ambitious Vostok Oil project
Latest licensing rounds
13 August 2020
The industry's most comprehensive list of current and recent rounds for onshore and offshore licences
Inaugural Somali regulator plots confident course
11 August 2020
Newly appointed Somali Petroleum Authority chairman and CEO Ibrahim Ali Hussein speaks to Petroleum Economist about his hopes for the Somali oil and gas industry