The government of Neuquén has been discussing the possibilities of producing these hydrocarbons to develop and supply the local market and to generate an export platform for the following years, which would allow the generation of foreign currency for the country.
The government of Neuquén has committed itself to Vaca Muerta´s potential, that is,
non-conventional hydrocarbons- to continue generating (with predictability and legal security ) investments to support, strengthen and promote the development of energy, that protect sources of work as well, and always in an articulation of public and private investments.
Before August 2019, when Decree No. 566 was issued, (which froze the prices of a barrel of oil and fuels), annual investments for more than 6,000 million dollars in the upstream sector had been projected in Neuquén basin for the following 4 years. Today, with the pandemic impact, those forecasts have been reduced by half, at least for the current year.
Even so, Neuquén province accounts for 28 % of the oil production of the country and 55 % of the gas, with more than the 70% of non-conventional origin. In Neuquén government the possibilities of production of those hydrocarbons are being discussed so as to develop and supply the local market as well as generate an export platform for the coming years which would generate foreign currency for the country.
Vaca Muerta and the non-conventionals
It is estimated that Vaca Muerta has an area of 30 thousand square km in the province.
And thirty- nine non-conventional hydrocarbon concessions covering an area of 9 thousand square kilometres have been granted since 2013 to date. Fourteen concessions, out of these 39, have finished the pilot phase and only 8 are in a continuing development stage, which are equivalent to 6 % of Vaca Muerta area
In these first seven years of non-conventional development, significant results have been achieved at the province level and in the country: to reverse the drop in both oil and gas production which had been taking place since the late 1990s, early 2000s and to achieve self-sufficiency apart from the high demand required every winter which demands liquefied gas import.
It is well worth mentioning the last figures to account for the relevance of this formation. In July, oil production in the province of Neuquén was 155,400 barrels per day (bbl/d) which represents an increase of 10 % year-on-year and 1,873,000 barrels were exported , equivalent to 40 per cent of the production of that month.
Non-conventional production
As regards unconventional production, there was an increase in the number of wells in effective extraction, compared to June 2020. In June there were 1,780 wells whereas in July seven more wells were reported, that is, 1,787 wells.
The areas with the greatest increase of wells in production are Aguada Pichana Este with four and Fortín de Piedra with three, being both gas producers of Vaca Muerta formation. They are followed by El Mangrullo and Sierra Chata – with two each one-that produce gas from the tight reservoirs of Mulichinco formation.
Non-conventional participation
The non-conventional production of oil during July was 119,500 barrels per day, which accounts for 77 per cent of the total production.
In the case of gas, 70 % of the production was unconventional, reaching 49.76 million cubic meters per day. The shale gas reached 45 % (31.53 million m3/day ) and the tight gas 25 %
(17 million m3/ /day
Necessary conditions
In a context where Vaca Muerta begins to export crude, a framework that guarantees
competitiveness in relation to its world rivals will be required.
The government states that the post-pandemic scenario will be more demanding and the markets will be more competitive. It is expected that there will be hydrocarbons with low costs and a demand that will take some time to come back to normal. These aspects require the best interaction of all the sectors of the industry to ensure capital investment in our country.
“It is necessary to keep and support the projects and investments put forward by the different companies, which will allow the increase of export levels”, said the Minister of Energy and Natural Resources of Neuquén, Alejandro Monteiro.
“It is necessary to generate mechanisms to grant firm export permits for liquids such as gas; once the domestic market has been supplied; and the free availability of foreign exchange that the exportable balances of hydrocarbons generates”, the minister pointed out.
Regarding the domestic market, he said that so as to guarantee its development, it is necessary to expand the existing transport infrastructure in the country, which would make it possible the expansion of production and self-sufficiency guarantee, “as for example expanding the capacity of existing gas pipelines as well as reactivating the tender for the construction of a new gas pipeline”.
This will also allow the reduction of gas imports that our country requires during the months of greater winter demand.
“The possibilities of the hydrocarbons production in the province are wide , even more if they are in the hands of the non-conventionals”, said Montero.
He also stressed that to be able to achieve this “all the sectors of the industry have to work together, and guarantee the continuity to the policies applied to develop the sector and in this way generate benefits for the whole country”.
