Argentina's Shale Gas Industry Sees Significant Investments and Potential for Growth

Strategic Insights -

Argentina's state-owned oil company YPF has announced a joint investment with Dow Argentina, a subsidiary of Dow Chemical Co., of $500 million for shale gas exploration in 2016, in addition to the $350 million already invested in a joint venture. The total sum could rise to $2.5 billion over the next few years. The joint venture aims to increase production from 750,000 cubic meters per day to 2 million cubic meters per day by 2016, with plans to drill an additional 30 wells in 2016 and over 180 wells in the coming years.

Key Takeaways:

  • YPF and Dow Argentina have invested $500 million in shale gas exploration in 2016, with a total potential investment of $2.5 billion over the next few years.
  • The joint venture aims to increase production from 750,000 cubic meters per day to 2 million cubic meters per day by 2016.
  • Plans include drilling an additional 30 wells in 2016 and over 180 wells in the coming years.
  • Chevron has invested $3.5 billion to drill shale wells, a figure that could rise to $16 billion by 2030.
  • ExxonMobil has received approval to drill five wells in the Vaca Muerta shale formation, with plans to invest $13.8 billion.
  • Argentina's regulated prices keep natural gas prices at $7.50 per million Btu and crude oil prices above $70 per barrel, making companies more interested in drilling.
  • Wood Mackenzie predicts that shale output in Argentina will double by 2018.
  • Argentina ranks second globally in terms of the size of shale gas reserves, with over 800 trillion cubic feet.

Statistics:

  • $500 million investment by YPF and Dow Argentina for shale gas exploration in 2016
  • Expected increase in production from 750,000 cubic meters per day to 2 million cubic meters per day by 2016
  • Plans to drill an additional 30 wells in 2016 and over 180 wells in the coming years
  • $3.5 billion invested by Chevron to drill shale wells, with potential to rise to $16 billion by 2030
  • $13.8 billion to be invested by ExxonMobil in the Vaca Muerta shale formation
  • 800 trillion cubic feet of shale gas reserves in Argentina, making it second globally
  • Wood Mackenzie prediction of doubling shale output in Argentina by 2018

Sources:

  • YPF and Dow Argentina joint announcement
  • EIA ranking of Argentina's shale gas reserves
  • Chevron's investment in shale wells
  • ExxonMobil's plans for drilling in the Vaca Muerta shale formation
  • Wood Mackenzie's prediction of shale output in Argentina