BUENOS AIRES: Total plans to ramp up natural gas production in Argentina with offshore and shale projects over the next few years, the head of the French company’s operations in the country said.
“We have five projects in process that are focused on gas,” said Jean Marc Hosanski, chief executive of Total Austral.
Of these, the largest to go online will be Vega Pleyade, a block off the coast of the southernmost province of Tierra del Fuego. It will come into production at 6 million cu m/d in the first quarter of 2016, Hosanski said on the sidelines of the Argentina Oil & Gas Expo in Buenos Aires.
He said a platform and a subsea pipeline are in place at Vega Pleyade, which is located to the south of Carina, the biggest offshore gas block in Argentina with production of about 8 million cu m/d.
Hosanski said that another project is to sustain Carina’s production by drilling an additional two wells, as well as to find more potential with two delineation wells and one exploration well.
Elsewhere in the country, Total is targeting shale and tight gas resources, where it sees ample potential for production growth. The company has interests in six blocks in Neuquen, the southwestern province where the huge Vaca Muerta shale play is located as well as several tight formations.
At Aguada Pichana, Total has been producing tight gas for more than five years.
The next step is to develop the shale gas potential of that block and Rincon de la Ceniza, both of which are in the gas and wet gas windows of Vaca Muerta.
At Aguada Pichana, the company is producing its first shale gas after a 12-well drilling pilot, with output so far at 800,000 cu m/d from four wells, Hosanski said.
“We are connecting the rest of the wells, and this will add more production,” he said.
The next pilot, in a partnership with Shell, is due to start in the second quarter of 2016 with an initial six wells, Hosanski said.
“We are very focused on gas,” he said. “We believe that we can contribute to Argentina’s goal of achieving energy self-sufficiency.”
Argentina is promoting investment to turn around a 20% decline in gas production over the past decade, which has ramped up imports now at about 30 million cu m/d, or a quarter of the 118 million cu m/d production and 23% of the 130 million cu m/d average consumption.
The government has extended field licenses for offshore and unconventional developments, evened out tax rates, and raised prices to $7.50/MMBtu for output from new projects.
This has attracted fresh investment, with Total and Shell advancing into pilot production on the heels of Chevron, which is working with state-run YPF on the first mass development in Vaca Muerta.
Hosanski said the decision to promote the local production will pay off for Argentina in the long run.
While global gas prices have plunged over the past year along with crude prices, it is still more expensive to import liquefied natural gas than the promotion price of $7.50/MMBtu, he said.
What is more, the expectation is that global LNG prices likely will in the medium term, he added.
Hosanski said Argentina’s shale resources, estimated at 802 Tcf, mean there is huge potential for increasing production.
“The resources are there,” he said.
There also is offshore potential in the Cuenca Marina Austral 1 (CMA-1), and “there are other prospects in Argentine waters that have not been explored,” he added.
Total is the second-biggest gas producer in Argentina, producing 31 million cu m/d, or 26% of the national total.
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