Argentina’s oil production could increase 40% with offshore development, says YPF

On Wednesday, October 19, Norwegian oil company Equinor and Argentina’s state-owned YPF highlighted that oil production in the country could rise by 40% with the development of offshore resources in the North Argentina Basin, 300 kilometers off the coast of Mar del Plata, in the province of Buenos Aires.

In addition, the strategic potential of this type of production was compared to that of Vaca Muerta in 2012.

It was within the framework of the public hearings required by the Justice that took place in the Ministry of Environment and Sustainable Development of the Nation, on the details of the exploration and drilling project of the Argerich-1 well in the CAN100 block, in the North Argentina Basin.

The hearing was not free of environmental criticism due to the impact of this type of exploration and drilling.

According to Pablo Iuliano, CEO of YPF, “this project contributes to the economic and social development of the country by adding value to Argentina’s resources and contributes to the decarbonization of the national energy matrix and that of other countries”.

Iuliano said, “this is a strategic project for Argentina as Vaca Muerta was in 2012”.

Gustavo Astié, ANC (Unconventional Assets) Business Manager of YPF, said that “the well (Argerich-1) we are proposing will look for a conventional reservoir that could produce 200,000 barrels/day of oil, if successful”.

This volume of production “is almost equivalent to what YPF produces today”, added Astié.

The company reported that 200,000 barrels per day are equivalent to almost 40% of the oil Argentina produces today.

“We continue to contribute to the development of energy resources that will enable Argentina not only to achieve energy security but also to position itself as a reliable energy supplier to the entire world,” said Nidia Álvarez Crogh, Equinor’s country manager in Argentina.

ENVIRONMENTAL IMPACT

According to Greenpeace, present at the hearings and one of the leading environmental organizations opposing this project, production in these offshore areas will cause death and damage to animal species and organisms, toxic waste dumped into the sea, and permanent damage to the marine ecosystem.

Greenpeace rejected this project and warned that the Equinor ship carrying out the seismic explorations is already on its way to Argentina.

PRIVATE STUDY

According to a report by the consulting firm Ecolatina and directed by Daniel Dreizzen, Milagros Piaggio, and Paula Gosis, in an annual average during the years 2025 and 2052 (minimum), if ten discoveries are made in the Northern Argentine Basin (CAN), the contribution to the Gross Domestic Product (GDP) would be 1.88%.

If we add the 1.62% projected for the Western Malvinas Basin (MLO), we will reach 3.5% of the GDP, with tax revenues of US$3.6 billion and US$3.1 billion, respectively. It is no small amount for a country in need of dollars.

The report adds that one discovery in this basin would reach 80,000 barrels per day (15% of the country’s total current production), while five discoveries would reach 400 barrels per day (73% of the country’s current total output).

With information from Bloomberg