Argentina is eyeing a copycat of Brazil’s offshore oil and gas development with a tender of blocks off the Atlantic coast, to take place in 2018, Energy Minister Juan Jose Aranguren told media at a conference.
He said it was possible that the subsalt basin along Brazil’s coast could continue into Argentine waters and any discovery in that basin would be highly lucrative for Buenos Aires. This area has not been explored yet, but now the Argentine government has hired Norwegian Spectrum to help the local state energy company, YPF, do a seismic survey there. An Australian company is also surveying the area, Searcher Seismic.
The minister added, “You will ask, ‘At these prices?' Yes, at these prices, because we want to be prepared when prices go up.” This optimism reflects the Argentine government’s prioritization of the energy sector for the country’s growth and energy security, although so far most of the attention has been directed towards the vast Vaca Muerta shale formation.
Mauricio Macri’s investor-friendly government has been pinning most of its economic growth hopes on Vaca Muerta, as the area is estimated to be one of the biggest of its kind in the world. Several Big Oil majors have already made commitments for exploration and production there, with the government offering tax incentives and above-market prices for their gas output from Vaca Muerta once it begins.
Reserves in the Vaca Muerta formation are estimated at 22.8 billion barrels of oil equivalent. This compares with just 2.4 billion barrels in proved conventional oil, but the offshore seismic surveys could result in a nice surprise. Of course, they can also result in a nasty one, if no meaningful resources are identified in the area, which will further strengthen the focus on Vaca Muerta.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.