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ConocoPhillips Bringing Know-How to Vaca Muerta

 

ConocoPhillips has signed a sales and purchase agreement with Wintershall Dea GmbH through which the companies will jointly develop the Aguada Federal and Bandurria Norte blocks in Neuquen province in central Argentina, Wintershall Dea reported Thursday.

Wintershall Dea stated that it will continue to operate the Vaca Muerta shale licenses. In addition, the Germany-based firm noted that it has already successfully conducted pilot projects in both blocks and that production testing is underway.

“ConocoPhillips’ extensive know-how developed across unconventional operations in U.S. shale plays complements Wintershall Dea’s technological expertise and decades of local experience,” Thio Wieland, Wintershall Dea board member responsible for Latin America, said in a company statement. “We are excited about this new partnership as it will allow us to expedite the development of the two blocks.”

According to Wintershall Dea, the transaction will grant ConocoPhillips a 45-percent interest share in the Aguada Federal block. Operator Wintershall Dea will hold a 45-percent interest as well, with Gas y Petroleo del Neuquen S.A. (GyP) owning the remaining 10 percent. In addition, the deal will give ConocoPhillips a 50-percent stake in the Bandurria Norte block. Wintershall Dea stated that it will hold the other 50 percent and retain operatorship.

“Today’s announcement underpins our firm belief in the potential of the Vaca Muerta shale play in Argentina,” commented Manfred Boeckmann, managing director of Wintershall Dea Argentina. “Wintershall Dea has many years of local experience and the technical know-how to help shape the country’s energy future in a sustainable and responsible manner.”

The transaction should close this year, pending approval by relevant authorities, Wintershall Dea stated.

Besides Aguada Federal and Bandurria Norte, other Vaca Muerta fairway blocks partially owned by Wintershall Dea include San Roque and Aguada Pichana Este, noted the firm, which has operated in Argentina for more than two decades. According to a March 2019 document from its website, ConocoPhillips also has received approval to acquire a stake in the El Turbio Este block in Argentina’s Santa Cruz province.

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Got some of my $$$ in this venture(twice removed).  I give it at best 50% chance of not being stolen by the Argentinians.  The question based on history is WHEN it will be stolen.  Hopefully it will pay back before it gets stolen.  Lot of O&G in Argentina.  How much?  No one knows other  than everywhere you drill you hit some. 

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5 minutes ago, Wastral said:

Got some of my $$$ in this venture(twice removed).  I give it at best 50% chance of not being stolen by the Argentinians.  The question based on history is WHEN it will be stolen.  Hopefully it will pay back before it gets stolen.  Lot of O&G in Argentina.  How much?  No one knows other  than everywhere you drill you hit some. 

Good luck. Did have many interests in the 90s in the Neuquen Basin , very very large tracts , and we had very good production from conventionals. After the 98 price crash, I had retained a lot of the interests which were later sold to a major.

They have started to move LNG cargoes out of Argentina from VM.

Yes, politics!!!

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I have a question. It is only a question and it is not intended to sow discord among the members of this august body...

With all the issues which have been experienced in the US shale oil patch, how do the firms operating, or planning to operate, in Argentina planning to mitigate these issues?

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9 hours ago, Douglas Buckland said:

I have a question. It is only a question and it is not intended to sow discord among the members of this august body...

With all the issues which have been experienced in the US shale oil patch, how do the firms operating, or planning to operate, in Argentina planning to mitigate these issues?

Its not discord its fun and firing up the neurons!!!

For one, I am very happy with my US onshore and US shale projects except for one year.

Here are some links and articles for this dead cow!!!!

https://www.spe.org/en/jpt/jpt-article-detail/?art=4918

 

_______________________________________________________________________________________________________

Vaca Muerta finally produces oil, a century after its discovery

 

BUENOS AIRES (Bloomberg) -- Along the western edge of Argentina’s Patagonia, on an arid steppe nestled against the Andes mountains, lies a shale formation known as Vaca Muerta. And ever since engineers confirmed what an American geologist suspected a century ago -- that the Vaca Muerta, or dead cow, contains massive amounts of oil and gas -- the rush to replicate the U.S. shale production boom was on.

First came YPF SA, the local oil giant, and Chevron. Then the likes of Total and Royal Dutch Shell. Between them, they poured some $13 billion into exploration over the past eight years. None of them ever had much to show for it, though. Obstacles kept popping up, and production was marginal.

Until now. In the last few weeks, two companies have exported two small cargoes from the formation, one of light oil, the other of liquefied natural gas, foreshadowing what industry officials say will be a steady flow of shipments by the end of the year. It’s way too early to declare victory -- any number of logistical and economic hurdles remain. But it’s the first sign that all the money and time invested might actually pay off and turn Argentina back into the global energy provider it used to be well over a decade ago.

“The system is going to change from one of importing oil and products to one of exporting,” said Sean Rooney, Shell’s chief in Argentina. “And that’s going to grow over time. It’s going to be some hundreds of thousands of bpd.”

Shell announced in December a scale-up of operations and, in a seal of approval for the first intensive shale drilling outside North America, Exxon Mobil this month made a similar commitment. Argentina’s light oil shipments are now forecast to reach 70,000 bpd next year.

What Bloomberg Intelligence says

"Further growth in Argentina’s oil and gas production and, just as importantly, export capability has the potential to markedly constrain trade deficits."--Jaimin Patel, senior credit analyst.

There’s a long way to go to match -- or even come close to matching -- the benchmark of shale production, the Permian basin in Texas and New Mexico, where output is driving Gulf Coast shipments to about 2.5 MMbpd. Infrastructure developments, including roads and gathering pipelines, lag drilling progress. Producers also want the government, which has been shifting Argentina away from protectionism, to finally let exports off the leash. That means ending a right of first refusal for domestic refiners and coming good on a promise to ditch export taxes at the end of 2020.

“If industry players and the government embrace this and support energy policies to facilitate exports, we have an exciting opportunity ahead,” said Miguel Galuccio, who led YPF’s first incursions into the dead cow and now runs Vista Oil & Gas, which sent the recent light oil cargo.

Drillers must also take into account politics. Most would like to see market-oriented President Mauricio Macri win re-election in October, especially since he faces an opposition ticket featuring former leader Cristina Fernandez de Kirchner, whose capital controls spooked foreign investors.

LNG cargo

In addition to the Vista shipment, YPF recently exported Argentina’s first liquefied natural gas from a barge it has anchored off the Atlantic coast. Next quarter, it’s planning more shipments from the barge, which can liquefy as many as eight cargoes a year. There’s also room to grow sales by pipeline to neighbors Chile, Brazil and Uruguay.

These gas exports are short-term solutions. With consumption in Argentina tailing off severely in warmer months, domestic drillers need access to much bigger markets to make shale gas investments worthwhile. That’s why they’re already mulling construction of an LNG terminal that could cost $5 billion, either on Chile’s Pacific coast or at an Argentine Atlantic port. 

“The key to tapping our potential is the LNG terminal,” Marcos Bulgheroni, CEO of Pan American Energy, said at a shale conference in oil city Neuquen this month.

Ideally, Bulgheroni said, the dead cow needs both coastal outlets. (No one, it should be noted, really knows why it’s called the dead cow. The most commonly told story in industry circles is that it’s because the formation looks like a cow lying down when viewed from the sky.)

If export plans move ahead swiftly, LNG production will soar and by 2024 Argentina could steal market share in Asia from the U.S., especially because tankers sailing from its shores can avoid congestion in the Panama Canal, according to a report by energy research firm Wood Mackenzie.

But if Argentina fails to gain a slice of the global LNG market in the next few years, producers would likely pull back drilling plans. To be sure, the nation is still an importer of the fuel.

When it comes to supplying energy, time really is of the essence. At the conference in Neuquen, Macri warned a room of oil executives that the world’s slow move away from fossil fuels imperils Argentina’s shale prize.

“Oil folks are laid back about the fact there’s still time,” he said. “But you never know where ingenuity will take us. So, we need to make the most of the moment."

_______________________________

https://www.rystadenergy.com/newsevents/news/press-releases/Will-the-vast-potential-of-Argentinas-Vaca-Muerta-shale-play-ever-be-unlocked/

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This is the type of news I have been predicting to be coming from many parts of the world. Oil lovers will love it. Natural gas advocates can use it as an argument that natural gas is more abundant. Gasoline lovers can buy their next pickup truck. Maybe Argentina will find a market in other South American countries and Los Angeles. 

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YPF has reached a preliminary agreement with Excelerate Energy L.P. to charter a second liquefied natural gas (LNG) carrier to transport Argentine LNG to the global market, Excelerate reported Thursday.

Excelerate stated that its carrier Excalibur will transport LNG from the Tango floating LNG (FLNG) unit – located at the port of Bahia Blanca, Argentina – to the world market. The company added that it will be executing the final agreement with YPF “in the coming days” and that operations should start in early September.

“We continue progressing in our ambition to add value to Argentine natural gas and to export surpluses during these months of low local consumption, to fully extract the potential as producer and exporter of Argentine natural gas,” Marcos Browne, executive vice president of Gas and Energy at YPF, said in a written statement distributed by Excelerate.

The majority of the natural gas processed by Tango FLNG will originate from Argentina’s Vaca Muerta shale formation. After processing, it will be transported to the Excalibur LNG carrier for export. Excelerate noted that loading YPF’s product onto Excalibur will take approximately 45 days and that the vessel will be in the service of YPF until May 2020.

“It is a milestone for us to partner with YPF in this activity by contributing all of our industry know-how in the transportation of Argentine natural gas to the world,” stated Gabriela Aguilar, Excelerate’s general manager in Argentina.

Excelerate pointed out that Excalibur is one of two ships that YPF will use to transport Argentine LNG to the world market. In May of this year, YPF commissioned its first cargo and became the first Argentine company to export LNG, Excelerate added. According to Exmar, which owns Tango FLNG, the barge-based vessel will be deployed in Bahia Blanca for 10 years and produce 500,000 tons of LNG annually.

Argentina’s Southern Hemisphere location could represent a major advantage for the country’s LNG producers, offering seasonal flexibility for Asian utilities, Wood Mackenzie reported in June.

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ExxonMobil Corp. is moving ahead with its long-term development project in Argentina’s Bajo del Choique-La Invernada block in the Vaca Muerta shale formation, the company announced Tuesday.

The project is expected to produce 55,000 barrels of oil equivalent per day (boepd) within five years and will include 90 wells, a central production facility and export infrastructure connected to the Oldeval pipeline and refineries, Exxon said.

Bajo del Choique-La Invernada is a 99,000-acre block operated by ExxonMobil Exploration Argentina (90 percent interest) with partner Gas y Petróleo del Neuquén (10 percent interest).

Exxon was given a 35-year concession in Vaca Muerta for the Bajo del Choique-La Invernada block in 2015 and began an exploration pilot program the following year. 

“We are encouraged by the excellent results of our Neuquén pilot project and look forward to increased production through this significant expansion,” Staale Gjervik, senior vice president of unconventional at ExxonMobil, said in a company statement. “The reforms implemented by the federal and provincial governments have been critically important to enabling the development of the Vaca Muerta basin as one of the country’s main energy resources.”

If the expansion is successful, ExxonMobil said they may invest in a second phase, which could produce up to 75,000 boepd.

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