According to Alejandro Monteiro, Minister of Energy for the province of Neuquén, the Argentine batch of Vaca Muerta shale will take between 12 and 18 months to resume before Covid-19 due to stagnation in demand.
“It will take some time for demand for fuel to fully recover,” Monteiro said at an industry webinar on Monday.
Many wells have been drilled but connected, however, even when a full recovery is required, drilling will take even longer to return to prepandemic grades due to garage limitations, he said.
YPF, Argentina’s largest state producer, said it had 71 shale oil wells and 10 shale fuel wells in Neuquén that were drilled and finished.
By mid-2019, they had announced that they would invest a total of more than US$6 billion in upstream projects in Neuquén until 2020, a figure that is now approaching $3 billion, the lowest since 2016, according to provincial data.
Companies have curbed investment after a freeze on oil and crude oil launched in August 2019 through the administration of then-President Mauricio Macri in a time before he lost his re-election to benefit through Alberto Fernandez.
The value freeze, along with political uncertainty under the new government and weaker market situations this year, has eroded Argentina’s climate for upstream investment.
Neuquén, who is in shale, however, experienced an increase in oil production in July. Gross production increased by 10% during the year to 155,400 b/d, according to the provincial government. Of this total, 77%, or 119,500 b/d. /d, were unconventional and 60,419 b/d were exported.
Gas production in the province fell by 12% to 70. 67 million m3/d. Shale production accounted for 45% of the total with 31. 53 million m3/dy a limited production of 24%, or 17 million m3/d.
But Vaca Muerta recorded 44 fractures in July, up from 398 the previous year, according to the knowledge provided through Luciano Fucello, national director of NCS Multistage, a US-based service company. But it’s not the first time All of last month’s fractures were performed through Halliburton for operator Chevron.
In January-July, there were a total of 1,459 hydraulic fractures in Neuquén, an average of 208 consistent with the month, to 553/month in 2019.
Monteiro said he said he is confident that a new fuel subsidy plan that will soon be released through the government could help revive shale activity and prevent a heavy build-up of fuel imports next year in winter.