Pan American Energy (PAE) of Argentina could soon announce plans to invest some US$1.4 billion in its home country, based on statements made by anonymous sources to Reuters.
Some of the funds will reportedly be spent on the Cerro Dragón oil field located in the San Jorge Gulf basin of the southern province of Chubut. PAE deemed Cerro as its "main asset" in the area with oil output of 98,000 barrels per day (bpd) in 2014 and the third largest gas producer in Argentina.
The unit of BP is also expected to make further investments in the provinces of Neuquén and Tierra del Fuego.
PAE extracts shale gas in the province of Neuquén, and started exploring for unconventional oil there in 2011. Among the sites controlled by PAE is the Lindero Atravesado block where the firm has been able to double its output, and is a partner at third and fourth largest gas production blocks in Argentina, Aguada Pichana, and San Roque, respectively.
PAE has reported a 34 percent rise in its oil output in Argentina between 2001 and 2015; thus increasing to 108,000 bpd. The company's production of gas rose 67 percent to 19 million cubic meters per day in the same period.
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The official announcement of the investment is expected to be made following a meeting by PAE executives and President Mauricio Macri on Thursday.
As mentioned by the Argentine press, the announcement could provide a boost to Macri following his controversial decision to raise gas and electricity rates. He claimed they were needed to prevent a potential energy crisis that he blamed on policies under his predecessor, Cristina Fernandez de Kirchner. An outcry against his actions led to a legal challenge filed by consumer rights groups and a federal court on 6 July placed an injunction against the rate hike.
By Erwin Cifuentes for Oilprice.com
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Erwin Cifuentes is a Contributing Editor for Southern Pulse Info where he focuses on politics, economics and security issues in Latin America and the Caribbean.… More