The international context of strong growth in oil and gas prices creates challenges and opportunities for Argentina to promote the development of Vaca Muerta as a global energy provider, assured the president of the Argentine Institute of Oil and Gas (IAPG), Ernesto López Duckling.
On the occasion of presenting the next edition of the International Exhibition Argentina Oil & Gas, which will be held from 20 to 24 next in La Rural, the head of the IAPG stressed that this development requires generating investment conditions for the growth of infrastructure with an export objective.
From the exhibition, which will be reissued after three years and always organized by the Institute, fMore than 220 companies will take part, including producers operating in the country, special service companies and suppliers of materials and equipmentamong others in the industry value chain.
Thus, the event in an area of 25,000 square meters allows to update the advances that the activity has been registering, in particular in the technologies related to exploration, production, distribution, transportation, refining, elaboration and commercialization.
Less to go until we meet again! Discover the next AOG Expo:
Conference on natural gas and unconventional development.
?? 5th edition of the #JOGYoung Oil & Gas.
? Activities by exhibitors to promote professional development. (Thread) pic.twitter.com/k8EWFFpxzc— IAPG (@IAPG_Info) January 31, 2022
López Anadón, in dialogue with Télam, referred to the particular situation in which the exhibition will take place due to the conflict in Ukraine, and pointed out that “the high prices of oil and gas are going to impact the Argentine economy, because they are imported more expensive derivatives and the export of oil does not reach a level that allows the economy to change”.
“In the future, in the medium term, if the country decides to provide market conditions for the development of resources, we could double production and achieve exports of US$10,000 million a year.and that would be a change for the Argentine economy,” he assured.
But along with the opportunities due to “the great export capacity” that can be opened up for gas and oil from Vaca Muerta in the face of a possible reordering of the global energy trade, the head of the IAPG also highlights that in the Neuquén formation ” has reached a significant level of productivity, which in many cases improves operations in the United States”, considered the cradle of the unconventional.
“In the future, in the medium term, if the country decides to give market conditions for the development of resources, we could double production and achieve exports of US$10,000 million a year”Ernesto Lopez Anadon
Despite the local and external difficulties imposed by the pandemic since March 2020, “technically the operators have done things very well by reducing costs, improving extraction efficiency. It was not a waste of time but that the companies took advantage of to improve their operations”, highlighted.
“Everything is well prepared for a massive developmentalthough what has been achieved to date is no less” with a formation that delivers 33% of the total crude oil production, and 48% of all the natural gas produced in the country, he explained.
As the IAPG has been highlighting, intensive resource development will require the drilling of 1,000 to 1,500 wells per year, between conventional and unconventional developments, with investments of the order of US$10,000 million per year.
Vaca Muerta Risks and Opportunities
By case, Vaca Muerta has the potential to produce 500,000 BOD and 100/150 Mm3/d of gas with an appropriate increase in activity.
This would give annual exportable balances of gas, oil and derivatives for a value of 15,000 million US$/year. compared to around US$ 4,000 million that are currently exported.
This development -explains López Anadón- hand in hand with the current high prices “it can be an opportunity to bring employment and investment in many sectors linked to the oil and gas value chain“, but at the same time they create a risk.
Such high and volatile prices of crude oil “could cause investments to go to other forms of generating energy and substituting oil, with which the window of opportunity to take advantage of Vaca Muerta can be limited.”
But in the meantime, everything indicates that european countries as large gas applicants, qThey want to minimize their dependence on the giant Russian supplierwhich if it is a certain possibility of being able arrive with local production to those markets with LNG.
“This scenario also requires investments not only to increase production but also for the construction of an LNG plant, a debate about its convenience that I believe is already settled,” said the head of the Institute.
In this sense, it is estimated that the construction of an LNG plant would require an investment of around US$ 5,000 million, but at the same time it would add at least another US$ 2,000 million of exports, to which petrochemical projects could be added.
But so too, the industry meeting from the week of 20 to 24 in La Rural will allow delving into other challenges that the industry has beyond Vaca Muerta, such as the need for infrastructure for transportation, the exploration of offshore resources in the Argentine Sea or tertiary recovery for conventional operations in mature deposits.
These topics will be the reason, among others, for the conferences, technical talks, exhibitions and the now traditional meeting with the CEOs of the main companies operating in the country.
