Activity levels are at all-time highs in Argentina’s prime oil and gas producing region, but equipment and transport bottlenecks are limiting its growth, an analyst said on Thursday, September 29, at an energy conference.
Alexandre Ramos, Rystad Energy’s vice president of shale research, said: “The Vaca Muerta shale region in the Neuquen province needs more drilling rigs, hydraulic fracturing fleets and natural gas pipeline transport to continue growing.
“Frac fleet availability is a massive bottleneck. We are seeing historically high gas production in Neuquen, so upcoming expansions are critical to allow Vaca Muerta to satisfy demand.”
The South American country’s gas production so far this year is running 132 million cubic meters per day (MMcm/d), according to state-run oil company YPF YPFD.BA, below 2004’s peak 142 MMcm/d. Crude oil production this year is running at 559,000 barrels per day (bpd), below the peak 847,000 bpd in 1998.
Marcelo Robles, manager of joint venture development at Pan American Energy, told the conference that water recycling will be needed to increase output.
Robles said: “We are using fresh water for fracking. In the future, we need to find a different solution. Sourcing and disposing of water are a challenge.”
Horacio Marin, oil producer Tecpetrol’s exploration and production chief, said the province could double its crude oil production and grow gas output through 2030 with an additional $7 billion devoted to drilling and completion and $12 billion in infrastructure investments.
According to Francisco Bertoldi, YPF YPFD.BA’s vice president of upstream unconventionals, the historical downward trend has been partially offset in recent years by unconventional production of oil and gas coming from Vaca Muerta’s shale reserves.
Argentina expects to begin construction on a gas pipeline from Vaca Muerta to hubs in the North this year that, from next year, will ease the bottlenecks that have kept pipeline utilization rates at over 90 percent. Exports through another gas line to Chile could also help ease the transportation issues.
A second segment of the gas pipeline to the North has not yet been put to auction.
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