Argentina’s Vaca Muerta, one of the world’s leading shale fields, is expected to reach a production of one million barrels per day (bpd) of crude oil by 2030, provided carrying capacity and availability of platforms do not limit its growth, research firm Rystad Energy said. in a press release Thursday.
According to Rystad Energy’s model, if output is “relatively unhindered,” oil production could grow from 291,000 bpd in February 2023 to more than 1 million bpd in the second half of 2030.
The projected growth could raise Vaca Muerta’s profile as a leading source of shale production, making it comparable to developments in the Bakken or Eagle Ford, two of the largest shale basins in the US, Rystad Energy said. It would also help the Neuquen region become a net oil exporter, “potentially contributing $20 billion in total revenue by 2030,” as the projected increase in crude exports is carried to neighbors to the south -Americans, Brazil, Chile and Peru, as well as in the USA and Europe. according to the press release.
According to Alexandre Ramos Peon, head of shale research at Rystad Energy, Vaca Muerta “could be the key to Argentina’s future energy economy after more than a decade of declines in oil production.”
However, major challenges pose a risk and could alter the shale play’s long-term outlook. “Capacity constraints remain and rig availability remains an ongoing concern. The learning curve for operators in the basin has been steep and they will need to continue this trend to maximize their production potential,” said Rystad Energy.
“Although there are huge challenges ahead, reaching the important threshold of 1 million barrels per day would change the country’s narrative, reduce its dependence on imports and become a key player in the regional and global oil market Peon said.
Recent production
By February 2023, Vaca Muerta’s gross oil production reached 291,000 bpd, an annual addition of 76,000 bpd, the report said. Oil production by major players Shell, Chevron, ExxonMobil and TotalEnergies increased by 62 percent in 2022 compared to 2021. Gas production by other local and international players, excluding Tecpetrol, grew by 63 percent, while gas production from state-owned YPF rose 43 percent. In February, daily gas production rose to 1.84 billion cubic feet per day, up 15 percent year-over-year.
According to the press release, Vaca Muerta’s production growth is “impressive but not extraordinary, given that it remains a relatively young development.”
“Significant regional developments began just a few years ago and accelerated in 2021 as the industry recovered from the Covid-19 pandemic,” he said.
“While concerns about growth persist, there are no issues with the quality of Vaca Muerta’s shale oil or its ability to produce hydrocarbons at scale (after adequate stimulation). Its shale is distinguished by its high pressures and substantial thickness. Its oil yield per foot is demonstrably superior to similar horizontal wells in major U.S. shale,” the energy research firm said.
Assumptions of the model
In its 1 million bpd projection, Rystad Energy modeled a theoretical scenario based on existing trends and technologies to forecast total oil production from the shale patch through the end of 2030. Model assumptions include: new wells that start production from now on. have the same yield per foot as the average completed and put into production in 2021-2022; oil production from gas wells is negligible; capital reinvestment is guaranteed until 2030; linear growth of COP activity in 2023 and beyond.
Rystad Energy assumed that operators will gradually adopt two-mile laterals over the next three years. It was also assumed that there were no oil industry downturns, global pandemics, significant macroeconomic changes, or political unrest in Argentina until 2030.
“With around 30 active rigs and an average drilling rate of 1.1 wells per rig per month, Vaca Muerta de Neuquen could expect up to 400 new wells drilled in a year. Assuming the oil and gas well completion ratio of 70 to 30 in 2022, the maximum possible number of oil wells drilled per year will therefore be 280,” the firm said.
“If new equipment is not introduced in the region, the rate of growth of Vaca Muerta will be reduced in the next two years. Bringing in high-spec rigs could improve drilling rates to less than 20 days per well, such as in the Permian Delaware and Bakken,” said Rystad Energy.
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