Saturday, August 16, 2014

Argentina: YPF Identifies Shale Discovery in Southwestern Province

According to The Latin American TribuneArgentina's state-controlled energy company YPF on Thursday (August 14) announced a shale oil find in the southwestern province of Neuquen.

The discovery was made at the Agrio formation, according to CEO Miguel Galuccio, who said at a press conference that production operations will be carried from the neighboring province of Mendoza.

“It’s the third time we’ve discovered oil at a non-conventional (shale) well,” Galuccio said, adding that the find “could be very significant for Mendoza, which has very mature fields.”

I was there (Wednesday night) until 0200 hours waiting for the well to be cleaned; that’s why we still can’t provide the production level, but we think it’s going to be very significant,” the chief executive said.

COMMENT: Argentina is counting on the development of non-conventional hydrocarbon resources, especially those in the massive Vaca Muerta shale formation in Neuquen, to achieve its goal of “energy self-sufficiency,” Galuccio noted.

He said the legal battle in the US pitting President Cristina Fernández’s administration against a group of holdout hedge funds demanding full payment on debt that Argentina defaulted on in 2001 will not have a negative impact on the company’s immediate plans.

“We’re fine. We have $1.5 billion. No short-term ups and downs that might jeopardize production," the CEO said when asked about Vaca Muerta.

Galuccio also said YPF has begun offshore operations at three blocks. YPF’s second-quarter net income came in at 1.5 billion pesos ($184.7 million), up 39.9% from the same period of 2013.