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Exxon plans to drill 90 wells and produce 55,000 barrels of oil equivalent from an oil and gas block in Argentina’s Vaca Muerta shale play, the company said in a statement, noting that this production rate would be achieved in five years.
The block Exxon will develop is located in the Neuquen Basin, which has seen a lot of activity from oil and gas companies recently. If all goes according to plan, a further production expansion would be in order, to bring the total production from the block to 75,000 barrels of oil equivalent daily.
The supermajor received a 30-year concession for the block, Bajo del Choique-La Invernada, in 2015 as part of a government push into unconventional oil and gas. Despite the tough investment conditions at the time, Exxon began exploration the following year. To date, there are three wells ready to start commercial production at the site as well as three exploration wells. Exxon has Qatar Petroleum as minority partner in the project.
Besides Exxon, BP, Total, and Chevron are among the companies that have already pledged substantial funds for oil and gas exploration and production in Vaca Muerta, which holds reserves estimated at 22.8 billion barrels of oil equivalent.
The country’s energy ministry expects that Vaca Muerta will be instrumental in the planned twofold increase in the national oil and gas production to 1 million bpd of crude and 260 million cubic meters of gas by 2023. That would entail an increase in exports to 500,000 bpd of crude and 80 million cubic meters of gas.
However, the oil and gas boom Argentina expected has been slow to materialize because of the underdeveloped infrastructure that makes production from the Vaca Muerta formation too expensive. However the problem is being addressed and Exxon’s decision to double down on the Neuquen Basin block is the latest evidence the Vaca Muerta has a commercial future.
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.
The world is lucky George P. Mitchell came along and showed us how to get it out, or we would be in serious financial trouble already. You wouldn't be buying a barrel of oil for anywhere near $60 without his fracking work.