Argentina's state oil and gas company YPF expects its oil and gas production from shale deposits to increase 35 percent this year thanks to falling costs at the huge Vaca Muerta play, the company said. It added, however, that overall production will decline by 2-3 percent because of maturing fields elsewhere.
Drilling costs for horizontal wells had fallen to $1,390 per lateral foot at end-2017, YPF said as quoted by Reuters, versus $2,270 in 2016 and $3,050 in 2015. Thanks to this, YPF now plans to drill 100 wells in Vaca Muerta. It has also slated five pilot projects for launch this year, one of them in partnership with Norway's state oil and gas major Statoil.
YPF also has joint ventures with Total, BP, Shell, Schlumberger, and Wintershall in Vaca Muerta, on which the Argentine company is focusing as a means of ensuring long-term oil and gas production growth.
"YPF has a total acreage of close to 5.5 million acres, reaffirming the potential in Vaca Muerta is actually huge," the company's chief financial officer told media at a recent conference call, adding that last month gas production from the El Orejano area hit 5 million cu m daily. YPF recently completed the drilling of its first 3,200-peter horizontal well in the shale play. Related: China Plans Record Natural Gas, Coal Production In 2018
The Vaca Muerta formation is estimated to hold some 16.2 billion barrels of crude oil and 308 trillion cu ft of natural gas, which makes it the second-largest in terms of gas reserves globally.
Among the Big Oil players who have declared interest in taking part in the development of Vaca Muerta are Chevron and Exxon. They have already invested in exploration there: Exxon has ponied up $250 million and plans to add another $10 billion to this over the next 20-30 years. Chevron invested $1.5 billion when it struck a joint venture deal with YPF three years ago.
By Irina Slav for Oilprice.com
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