Argentinian state-owned exploration company, YPF, announced on Sunday that it has discovered a new shale gas deposit in the country’s prolific Vaca Muerta shale region.
According to the U.S. Energy Information Agency (EIA), Argentina ranks fourth in terms of its shale oil, and second – after China – in terms of its shale gas deposits. The country’s shale oil and gas deposits are estimated at 27 billion barrels and 802 trillion cubic feet respectively. It is believed that 40 per cent of Argentina’s shale gas resources and 60 per cent of its shale oil is located in the Vaca Muerta formation.
The most recent find, in the Patagonian province of Neuquen, suggests there is likely much more gas in the vast but barely tapped Vaca Muerta field, YPF said.
“Initial results showed high gas productivity,” YPF said in a statement. “The La Ribera x-1 well had initial productivity of 43,000 cubic meters of gas per day with a thickness of 258 meters.”
The discovery comes at the heels of another find – last month – of a conventional oil field in the southern province of Rio Negro with reserves of around 40 million barrels.
While the slumping oil prices have put a bit of a damper on the Argentine shale-dream, there are those who believe that the investors’ interest will pick up again in the climate of new shale discoveries and following the departure of the current President Cristina Fernández, who is to step down in October.
In a note issued in May this year, the investment bank Goldman Sachs said that while Vaca Muerta is in the early stages of development, is showing potential for production to be scaled up economically.
“While production in the Vaca Muerta averaged 45kbls/d since the start of 2015 from 290 wells, we believe that a ramp up of production and increase in wells drilled will allow producers in the basin to reap the same rig productivity gains from a roll-out of the well manufacturing process and also see an improvement in type curves as the shift to horizontal drilling takes place” the bank said.
In conversation with The Financial Times, Federico Tomasevich, chief executive of Puente, Argentina’s largest investment bank, which has just opened an office in London to capitalise on renewed interest in the country, was equally up-beat about the approaching change in government.
“There is beginning to be a lot of interest from investors because of the political change that is coming,” he said.
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