
Argentina hydrocarbons watch: Fracking ground to a halt in April
Fracking in Argentina’s Vaca Muerta unconventional play ground to a halt in April, with companies failing to register a single hydraulic fracturing stage for the whole month.
According to a report published by consultancy NCS Multistage and cited by local press, fracking in the Neuquén basin halted completely compared with 470 stages in March.
The report shows the impact that reduced demand for fuel, a consequence of the lockdown measures to combat COVID-19, have had on unconventional activity. Both NOC YPF and midsized local player Vista Oil had reported unconventional well shutdowns due to the crisis. Unconventional wells with natural flow are easier to recover after a shutdown than conventional ones, according to Vista CEO Miguel Galuccio.
The local industry is facing an unprecedented headwind as there is not enough outlet for the oil produced and prices are very low for sales that can be made. While smaller producers such as Vista are eyeing storing their excess production in offshore barges to sell later, for bigger companies with higher production that may not be feasible.
Oil stocks have accumulated throughout the production chain, leading several refineries to halt operations or significantly reduce output.
In part to switch strategies when navigating the crisis, YPF has appointed a new CEO, Sergio Affronti, to replace Daniel González.
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Provincial oil company GyP, which supervises Vaca Muerta investment and takes a share in every field it awards to private players, has sold its 10% stake in the Aguada Federal block for US$17.6mn.
The company will use part of the funds to service debt commitments, according to local press.
The province of Neuquén, which owns GyP, has seen its finances deteriorate rapidly as a consequence of the oil price rout and the COVID-19 pandemic. The oil industry has been its main source of growth in recent years, and the province takes a share of every sale of crude extracted from the province, meaning it has been impacted by both lower sales and weaker prices.
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State-owned company Ieasa is tendering the purchase of 12 cargoes of natural gas to arrive in June and July, as local demand picks up in winter.
According to a report by Reuters, the tender would be active until May 12. The cargoes will be delivered to the port of Escobar, Buenos Aires province.
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