Shale Oil Boom Fuels Argentina’s Dreams
by Liliana Samuel
Buenos Aires – Argentina is investing heavily in shale oil, hoping to ride it to energy self-sufficiency and end dependence on imports that cost billions of dollars each year.
Argentina is a pioneer in shale oil exploration and now the third-biggest producer of it after China and the United States, according to US figures.
Its state oil concern YPF two years ago started production at Loma la Lata, a windswept Patagonian plain under which lies clay-rich soil that contains shale oil. It is part of a larger shale-rich expanse called Vaca Muerta (meaning “dead cow”).
To produce it for market, unconventional oil requires the same hydraulic fracturing (“fracking”) and horizontal drilling techniques as shale gas.
And now, YPF is using its shale oil know-how to speed into operation about 200 unconventional wells in the Loma la Lata, Vaca Muerta area every year. It plans to spend $15-billion in a decade, reaching between 1 500 and 2 000 of these wells.
“With just two of these areas of 2 000 wells each, Argentina can fully meet its domestic oil demand, and even have some left over to export,” said Pablo Iuliano, YPF’s unconventional oil manager.
An Argentine-Chinese group called Bridas announced on Wednesday it will invest $500-million to explore for shale oil in Vaca Muerta.
All this is music to the ears of the Argentine government. The country spent more than $11-billion on oil imports in 2011, and the total is expected to soar to $13-billion this year.
Energy reserves that lie below Vaca Muerta – in the provinces of Neuquen and Mendoza – have become the country’s great hope for turning around its energy sector, and achieving a trade surplus.
But it’s not just pipe dreams. It’s already in the pipelines.
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