A new center for global oil and gas production could appear on the map. Investments have flowed into shale production in Argentina, which is expected to rank between Iran and Norway in terms of production levels. The situation is somewhat similar to the oil crisis of the 70s, when, as a result of the embargo on the supply of Middle Eastern oil to the West, production centers such as the North Sea and the Gulf of Mexico appeared. Experts are aware that much will depend on oil prices.
Argentina’s new market-oriented government and concerns about oil supplies from the Middle East and elsewhere are driving increased drilling and production in Argentina’s southern Patagonia, home to the vast Vaca shale formation. Muerta, which means “Dead Cow” in Spanish”. – writes Reuters.
The group notes that the government that was involved in Argentina, led by a libertarian president, Javier Miley pushing oil and gas production and exports to earn foreign currency, and applying incentives to attract large investments.
The shale deposits in the Vaca Muerta formation, whose area is comparable to Belgium, are considered to be the second largest in the world in terms of gas volume and the fourth in terms of oil . Over four years, oil production in the region has increased to four hundred thousand barrels per day.
“Vaca Muerta can easily supply 2 million barrels per day,” – said Argentina’s former secretary of hydrocarbon resources Jose Luis Sureda. Growth is already so staggering that the infrastructure can’t keep up with population growth, he said.
“For this (even more production growth) to happen, other things are needed: more infrastructure to bring oil to ports, a lot more people and more equipment,” said José Luis Sureda.
Reuters noted that the main obstacle to the development of a new shale production plant is proper logistics.
“Argentina still lacks LNG export capacity, which will take years to fully build. Local roads, schools and housing in places like Anelo are still far from what they should be,” the group writes.
In the coming years, new oil developments will exceed those of gas because it is easier to supply oil to world markets, said José Luis Sureda.
“Argentina, if all goes well, could become a global player by 2030. – says the director of the consulting company Aleph Energy Daniel Drazen.
The current situation is somewhat similar to the oil crisis of the 70s, when high oil prices due to the oil embargo led to the opening up of the world’s oil producing areas – in North Sea and Gulf of Mexico.
Chief analyst at FNEB and expert at the Financial University under the Russian Government Igor Yushkov note that new players are now appearing on the global market.
“This is Guyana, where ExxonMobil produces offshore and the production level is already around 400 thousand barrels per day, and in the coming years they promise to increase it to 1 million barrels. It’s the same in Argentina, where huge investments have been made.” – the expert notes.
According to him, much will depend on world oil prices in the coming years.
“Granite oil has a high production cost. And in Argentina, unlike the US, there are not many raw materials and deposits from which you can choose according to cost. If oil prices fall to around $50 per barrel, we may even see a decline in production volume in Argentina. Therefore, it is important for such players to maintain high prices in the global market,” – added Igor Yushkov.
The price of benchmark North Sea Brent was trading in the second half of October at around $75 per barrel. To maintain this level, OPEC + countries continue to adhere to production cuts. At the same time, producing countries that do not participate in the agreement are trying to increase production. Among them are the countries of South America, including the ambitious Guyana, Brazil and Argentina.
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2024-10-23 16:13:00
