Argentina Seeks to Become Major Oil & Gas Player as Production Climbs

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Argentina Secretary of Energy Flavia Royon was present this month at the CERAWeek conference in Houston to promote her nation's energy industry and discuss company developments.

During her talks and meetings, Royon stressed the importance of Vaca Muerta, the world's second-largest shale gas reservoir and the fourth-biggest non-conventional oil formation, for the production of hydrocarbons, especially natural gas.

The development of Vaca Muerta over the last few years has offered Argentina new oil and gas sources and allowed the country to develop its industry and generate much-needed foreign currency from hydrocarbon exports.

"Argentina is going to play a significant role on the global energy map...It is important to expose all the potential that our country has in terms of energy. We are in an international context that demands alternative resources that we already have as a base, such as Vaca Muerta gas. This sets the conditions that make investment attractive to develop the industrialization of LNG (liquefied natural gas or hydrogen," Royon said during a CERAWeek event.

To bolster its energy industry, the Argentine government is looking to promote the sector through a stable legal framework that can safeguard energy investments over the long term to attract international companies, according to the ministry's statement.

Besides Vaca Muerta, companies in Argentina have been launching exploration efforts in the Argentine North Basin, where YPF S.A. (NYSE:YPF) (Buenos Aires), Equinor (NYSE:EQNR) (Stavanger, Norway) and Shell plc (NYSE:SHEL) (London, England) have already made some discoveries in the Argerich block. More of Argentina's offshore blocks could be explored in search of new energy sources.

Argentina also is promoting and building new midstream infrastructure in order to cope with a bigger hydrocarbon sector. Argentina is constructing the 573-kilometer President Nestor Kirchner gas pipeline, which is expected to be ready by mid-year and increase the transportation of hydrocarbons from Vaca Muerta. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipelines Project Database can click here for a list of pipeline project reports.

Additionally, last month Shell inaugurated the Sierras Blancas-to-Allen oil pipeline with a capacity to transport 120,000 barrels of oil per day (BBL/d), and YPF and Petronas have agreed to build a gas liquefaction plant to boost exports. Subscribers can click here for project reports on the Sierras Blancas-to-Allen oil pipeline.

Argentina's oil production in January stood at 626,000 BBL/d, about 9.9% more than the same month last year, while natural gas production averaged 128 million cubic meters per day, 11% higher than in January 2022.

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