Optimism and Activity Rising in the Vaca Muerta

Abstract

Optimism and Activity Rising in the Vaca Muerta Confidence in the geologic potential of Argentina’s unconventional resource plays is higher than ever, which is turning the focus to how and when oil and gas producers there will ramp up commercial levels of production. At stake is whether the well-known Vaca Muerta formation will become a shale superpower—and the first outside of North America. Its immense reserves, estimated to be 308 Tcf of gas and 16 billion bbl of oil, according to the US Energy Information Administration, and the work done so far to prove them has attracted commitments of billions of dollars from international majors BP, ExxonMobil, Shell, and Chevron. But leading the pack is the domes-tic explorer and producer Yacimientos Petrolíferos Fiscales (YPF). The company’s progress may offer a reasonable expectation of what the future holds. Operating more than 540 shale wells in the Vaca Muerta and running 44 rigs at the end of last year, YPF has been by far the most active shale operator in Argentina. Eighty of those wells are horizontals in the Loma Campana field, operated as a joint venture with Chevron. The first were drilled and completed there in 2013, and the most recent have shown an average productivity increase of 25%, a figure based on 300 days of production data. In all, YPF drilled 56 horizontals last year, showing that it has picked up the pace compared with 2015 when 30 were drilled and the 2 years prior when a combined five were drilled. The gas portion of the 62,300 BOED YPF is reporting in gross shale production (which includes areas outside Loma Campana) represents 22% of its total natural gas production. That will be an important piece of the pie chart to track going forward because the majority of YPF unconventional programs, and those of its competitors, have become increasingly focused on boosting Argentina’s gas supplies. This is a shift from the initial programs that targeted the oil window and is being driven by a newly elected government that is aiming to reverse the country’s position as a net importer of gas. EOR Project in the Vaca Muerta Shale Gives Water for Oil New research from Argentina is trying to see if the Vaca Muerta shale formation is a viable candidate for enhanced oil recovery (EOR). The laboratory and field experiments completed so far are promising, which in itself is a notable development since there have been very few breakthroughs on this front for the shale sector. The companies leading this work, Buenos Aires-based VYP Consultores and InLab, are using a simple huff-and-puff approach to shale EOR that involves injecting produced water back into a well for a soaking period of 30 days. During this time, with the well shut in, the formation does most of the work through imbibition; i.e., the water goes into the formation, and exchanges places with hydrocarbons.