• 3 minutes Australian power prices go insane
  • 7 minutes Wind droughts
  • 11 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 2 days Is Europe heading for winter of discontent with extensive gas shortages?
  • 3 days GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day Hopes Are Dashed For International Oil Companies In North Iraq
  • 57 mins The United Nations' AGENDA 2030 - The vision for One World Governance ...an article by the famous Dr Robert Malone
  • 7 hours 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 3 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 6 hours "Mexico Plans to Become an Export Hub With US-Drilled Natural Gas" - Bloomberg - (See image)
  • 4 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 6 days Changing Gazprom ADRs to Russian shares
  • 13 hours The Federal Reserve and Money...Aspects which are not widely known
China Oil Imports Pick Up After Slump

China Oil Imports Pick Up After Slump

China’s crude oil imports rose…

How High Can U.S. Shale Production Climb?

How High Can U.S. Shale Production Climb?

While the EIA has forecast…

Kazakhstan’s 300,000-Bpd Kashagan Oilfield Halts Output

Kazakhstan’s 300,000-Bpd Kashagan Oilfield Halts Output

The offshore oilfield Kashagan in…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Exxon Mulls Big Investment In Argentina As Part Of Shale Strategy

ExxonMobil is betting on shale development not only on its home turf. The supermajor is also planning to speed up investment plans for shale gas drilling in Argentina’s prized Vaca Muerta formation in the Neuquen province.

Exxon will start drilling Vaca Muerta in May, by drilling horizontal wells with laterals of 2,500-3,000 meters (8,202-9,843 feet), Neuquen province governor Omar Gutiérrez said on Monday. The U.S. major’s total investments in developing Vaca Muerta will have reached $750 million by the end of this year, said Gutiérrez, who discussed Exxon’s plans with executives of Exxon and its subsidiary XTO in Houston last week.

ExxonMobil Exploration Argentina (EMEA) has been present in Vaca Muerta since 2010. Last year, following the successful initial exploration results in the Bajo del Choique-La Invernada block, EMEA launched a pilot project to continue to assess the productivity and recovery of horizontal wells in Vaca Muerta. The project includes drilling five wells, as well as early production facilities and a gas pipeline.

The pilot project was expected to take up $250 million of investment. In June last year, then Exxon chairman and CEO Rex Tillerson said that based on the project’s results, the supermajor would launch full-scale development over the next 20-30 years for an investment that could be “well in excess” of $10 billion.

Now, according to Neuquen’s governor Gutiérrez, Exxon and XTO expect to boost gas production to 5 million cubic meters (176.6 million cubic feet) per day within the next 2-3 years. Related: Does This Reversal Show A Crack In The Philippines’ War On Mining

The sooner a company starts producing gas, the more pricing incentives they can get. In a bid to boost domestic gas development, Argentina has extended the pricing incentives through 2021. Producers will be paid $7.50/MMBtu for their production by the end of 2018, and then the incentives would gradually decrease to $6/MMBtu in 2021. Free market pricing is expected to come into effect in 2022, with prices expected to average $4/MMBtu, or some $1/MMBtu less than current market average prices, according to Platts.

Argentina is trying to boost its domestic shale gas output in an effort to reduce imports. The country’s natural gas production increased in 2015 for the first time since 2006, but Argentina is still a net importer of natural gas. Plans are that the country could stop importing LNG by 2022. Vaca Muerta has an estimated 308 trillion cubic feet of technically recoverable shale gas resources, and has been compared to the Eagle Ford play in Texas in terms of depth, thickness, pressure, and mineral composition.

Exxon’s push in Argentina’s shale should not come as a surprise, after the major said last month that it would invest in shale a quarter, or $5.5 billion, of its 2017 spending budget, mostly in the U.S. “More than one quarter of the planned spending this year will be made in high-value, short-cycle opportunities, including in the Permian and Bakken basins,” Exxon said in its statement.

Argentina’s Vaca Muerta has attracted many other international players seeking exposure to shale exploration and drilling.

Chevron, for example, has been developing areas together with Argentine oil company YPF. In Chevron’s non-operated Loma Campana concession in Vaca Muerta, 58 horizontal wells were drilled last year, and the drilling program is expected to continue this year, the U.S. major said in its 2016 annual report.

YPF and Schlumberger signed last week an agreement to start a shale oil pilot project in Bandurria Sur Block in Vaca Muerta, involving $390 million in phased investment by Schlumberger.

Argentina’s Tecpetrol said last month that it would invest $2.3 billion by 2019 in the first phase of the development of the Fortín de Piedra area in Vaca Muerta. A total $1.6 billion of the investment is planned to go for drilling of 150 wells, and another $700 million will be spent on the construction of treatment facilities and gas pipelines.

Related: How Far Will OPEC Go For $60 Oil?

Earlier this week, Shell opened a 10,000-bpd oil and gas treatment plant in its acreage in Vaca Muerta. Last year, the Anglo-Dutch oil and gas major said it would pour $300 million annually into its Vaca Muerta operations until 2020, both in upstream and downstream.

Exxon and other major international players are ramping up operations and investment in Vaca Muerta, while Argentina is trying to lure investment with gas production incentives and a pledge to eliminate an oil products export duty that has been in place for 15 years.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • petergrt on April 21 2017 said:
    Finally an article on shale other than the US . . . . and now how about the Russian shale . . . . .???

    The only problem is that the Argentinians never pass up an opportunity to shoot themselves in the butt - as in voting in Peronistas - Socialists back into power . . . .

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News