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Argentina watch: Seismic impact evaluation event, gas study, YPF-ministry accord

Bnamericas Published: Friday, June 11, 2021

Authorities are preparing to publish environmental impact evaluation documents corresponding to an offshore seismic acquisition project targeting areas CAN 108, 100 and 114 of the Argentina Norte basin.

An associated public event will be held online on July 1 by the environment and sustainable development ministry, according to a notice in the official gazette.

The government this year authorized Shell to join YPF and Equinor to explore CAN-100. YPF and Equinor are partners at CAN-114, while Equinor has a 100% interest in CAN-108.

Argentina held its first offshore licensing round in 2019. Winning bidders last year presented environmental impact studies.

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Natural gas producers in Argentina say long-term regulatory stability and visibility would help support development of the country’s Vaca Muerta shale formation – a topic British association Oxford Institute for Energy Studies touched on in recent report.

The Argentine government’s 2020-24 incentive program Plan Gas 4 has helped spur fracturing activity. A key plank of the scheme is a medium-term contract mechanism in US dollars, with contract prices set by public auctions.

“The plan provides assurance to producers about cash flows and price predictability for the next four years,” the report reads.

“However, there is a lack of visibility of the government’s plans for price policies post 2024, which is coincidentally the year when presidential elections will take place.”

Oil and gas drilling activity has bounced back from a plunge in 2020 but is still markedly below 2018-19 levels. 

Argentina's government also has a hefty gas and electricity subsidy burden.

ALSO READ: Snapshot: Argentina’s top 10 shale gas producers

ALSO READ: Shell Argentina outlines Vaca Muerta focus

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The production ministry and YPF inked an agreement to create a program to strengthen the hydrocarbons value chain. 

A ministry statement said: “Through this agreement, the oil company will have assistance from the ministry to spur the development of its local providers, with the objective of improving the competitiveness of the national value chain, substituting imports, promoting training and recovering social capital in the provinces where the company has operations.”

A central aim is strengthening more than 5,000 SMEs, the ministry said.

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