Argentinian Duo to Develop Tight, Shale Gas
Argentinian state producer YPF and Buenos Aires-listed Pampa Energia are to invest US$150mn in tight and shale gas development in central Argentina.
Pampa announced August 1 that YPF, as operator of Rincon del Mangrullo block, signed an agreement that day with authorities in Neuquen province to be granted an unconventional exploitation concession. The block is 50-50 developed by YPF and Pampa-owned Petrolera Pampa.
Under the agreement, Neuquen province granted a 35-year period extension to the exploitation concession in exchange for the $150mn investment commitment destined to an unconventional gas pilot programme that aims to further develop Mulichinco formation (tight gas) and explore the potential in Las Lajas (tight gas) and Vaca Muerta (shale gas) formations. However, Pampa through its subsidiary Petrolera Pampa, is participating only in the block’s tight gas development so its commitment corresponds to 30% ($45mn) of the total $150mn pledged, with YPF funding the other $105mn.
This will be the first time that horizontal wells will be drilled on the block, said Pampa, although it notes that YPF has lots of experience picked up from the operation of other unconventional blocks in Neuquen.
Last month BP-led Pan American Energy, Total, Wintershall and YPF agreed with Neuquen authorities to invest $1.15bn out to end-2021 developing licences on the extensive Vaca Muerta shale, while Shell and Chevron are also looking to produce shale oil and gas on the same formation – with final investment, inclusive of those cited above, expected to total $5bn.
Rincon del Mangrullo block, in Neuquén province, covers 183 km2. Since 2013 YPF and Petrolera Pampa have been developing the block, producing natural gas from Mulichinco formation as well as exploring the potential at Las Lajas. So far 116 wells have been drilled, producing 177mn ft3/d of unconventional gas, said Pampa.
Mark Smedley