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Argentina hydrocarbons watch

Bnamericas Published: Friday, February 17, 2023

Argentine hydrocarbons, renewables and cement firm PCR has expanded its upstream footprint in Mendoza province.

PCR has acquired, from Phoenix Global Resources, five areas along with a crude delivery plant and associated assets.

The acquisition will ramp up company oil output in the province to 1,500b/d, a regulatory filing said. Based on federal energy department data for October, this works out to an increase of around 50%.

“Likewise, the company will be adding reserves and new areas with potential,” the filing said. “In this way, PCR projects an increase in production and reserves of the blocks acquired through investment activities aimed at achieving production growth, optimizing and reactivating existing wells, as well as evaluating possible new hydrocarbon accumulations and drilling in new structures.”

In October, PCR production in Mendoza was 159m3/d, or 1,000b/d, according to data from the federal energy department. Overall provincial oil production was 8,800m3/d (55,350b/d). The two biggest players were state oil firm YPF (5,380m3/d) and private player Pluspetrol (2,380m3/d), with the rest of the pack each producing under 325m3/d.

The areas - Cerro Mollar Norte, Cerro Mollar Oeste, La Brea, La Paloma-Cerro Alquitrán and Puesto Roja - are under production and located in the northern zone of the Neuquén basin.

PCR’s total oil production in October was 1,470m3/d, with La Pampa province assets Medanito and 25 de Mayo-Medanito Sud Este, together accounting for around two thirds.

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Argentine oil pipeline concessionaire Oldelval said any decision to further expand a key duct between the Neuquén basin and export facilities in Buenos Aires province would hinge on client demand, local media outlet Más Energía reported. 

Producers signed contracts in December to secure capacity under a current expansion scheme, known as Proyecto Duplicar. Firms in the basin are ramping up output.

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The hydrocarbons chief of the country’s second-biggest oil province by output, Chubut, met with producers, services firms and workers involved in the Golfo San Jorge basin.

Martín Cerdá said the local industry was facing a critical situation, citing a lack of equipment and consumables as well as high inflation.

Parties agreed to work on proposals to, in turn, support production efficiency, Cerdá said in a provincial government statement. He added that strong international oil prices were favorable, but that a drop would create more challenges for the jurisdiction.

The news comes following reports of services and logistics firms shifting their focus away from Golfo San Jorge and onto shale operations in the fast-growing Vaca Muerta formation in the Neuquén basin.

Golfo San Jorge is home to Argentina’s second-biggest producing oil concession: Anticlinal Grande-Cerro Dragón, operated by Pan American Energy.

PRODUCTION

In December, Argentina produced 98,900m3/d oil, according to data from the General Mosconi Institute energy think tank.

Golfo San Jorge basin production climbed 0.2% month-on-month and 1.1% year-on-year to 32,600m3/d, while Neuquén basin production climbed 1.5% and 19.6%, respectively, to 60,900m3/d.

ALSO READ: Argentine oil export requests climb, Neuquén shale drillers power growth

ALSO READ: Argentina urged not to put oil eggs in one basket

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