BUENOS AIRES May 22 (Reuters) – Argentina has won the»geological lottery» with its 1,000-foot-thick Vaca Muerta shaleoil and gas field in Patagonia, a spokesman for Chevron said onThursday, as the U.S. energy giant increases its investments inthe country.
The company and state-owned oil firm YPF announcedplans last month to invest an additional $1.6 billion to developVaca Muerta.
«The shale play in Argentina is unique because of the rock.Its thickness. Argentina has kind of won the geologicallottery,» Chevron spokesman Kent Robertson told Reuterson Thursday during a trip to Argentina’s capital, Buenos Aires.
Shale formations often resemble layer cakes, with shalesqueezed between layers of unproductive rock.
«But Vaca Muerta is like one big cake, 1,000 feet (305meters) thick in places, which means one well can be much moreproductive,» Robertson said.
Some studies indicate Argentina is sitting atop a shalebounty that could transform the outlook for the WesternHemisphere’s supply and secure the South American country’s energy self-sufficiency for decades.
«What we’ve seen with YPF has been positive so far. Theirper-well costs are coming down,» Robertson added. «And theprovincial governments in the area of Vaca Muerta understand oildevelopment. They support it. So that’s one less barrier.»
Many communities object to hydraulic fracturing, also knownas fracking, by which water, sand and chemicals are injecteddeep into shale fields to unlock hydrocarbons.
Most big energy companies have struggled with the shalesector so far. Chevron will hold its annual shareholder meetingnext week in Midland, Texas, in part to highlight its renewedinterest in the Permian Basin in western Texas.
Huge shale reserves exist around the world, but they areoften found in areas without good geological data, explorationand services companies, public support, pipeline infrastructureand the sufficient scale to make a success of drilling.
«One of the unique things about Vaca Muerta from aninternational perspective is that it is in an area where you’vealready got oil industry activity,» Robertson said.
«There is already an established oil industry in the regionwhere the shale is. You’ve got service companies, you’ve gotpipelines and infrastructure,» he added. «You’ve got existingassets that do not need to be recreated. Plus you’ve also got ahead start in that you have knowledge of the rocks.»
Asked what was the key reason behind Chevron’s decision toincrease its investment in Vaca Muerta, Robertson answered: «Welike the rock. That’s first and foremost. Drilling costs arecoming down and the well results so far were sufficient towarrant additional investment.» (Additional reporting by Ernest Scheyder in New York; Editingby Paul Simao)
The company and state-owned oil firm YPF announcedplans last month to invest an additional $1.6 billion to developVaca Muerta.
«The shale play in Argentina is unique because of the rock.Its thickness. Argentina has kind of won the geologicallottery,» Chevron spokesman Kent Robertson told Reuterson Thursday during a trip to Argentina’s capital, Buenos Aires.
Shale formations often resemble layer cakes, with shalesqueezed between layers of unproductive rock.
«But Vaca Muerta is like one big cake, 1,000 feet (305meters) thick in places, which means one well can be much moreproductive,» Robertson said.
Some studies indicate Argentina is sitting atop a shalebounty that could transform the outlook for the WesternHemisphere’s supply and secure the South American country’s energy self-sufficiency for decades.
«What we’ve seen with YPF has been positive so far. Theirper-well costs are coming down,» Robertson added. «And theprovincial governments in the area of Vaca Muerta understand oildevelopment. They support it. So that’s one less barrier.»
Many communities object to hydraulic fracturing, also knownas fracking, by which water, sand and chemicals are injecteddeep into shale fields to unlock hydrocarbons.
Most big energy companies have struggled with the shalesector so far. Chevron will hold its annual shareholder meetingnext week in Midland, Texas, in part to highlight its renewedinterest in the Permian Basin in western Texas.
Huge shale reserves exist around the world, but they areoften found in areas without good geological data, explorationand services companies, public support, pipeline infrastructureand the sufficient scale to make a success of drilling.
«One of the unique things about Vaca Muerta from aninternational perspective is that it is in an area where you’vealready got oil industry activity,» Robertson said.
«There is already an established oil industry in the regionwhere the shale is. You’ve got service companies, you’ve gotpipelines and infrastructure,» he added. «You’ve got existingassets that do not need to be recreated. Plus you’ve also got ahead start in that you have knowledge of the rocks.»
Asked what was the key reason behind Chevron’s decision toincrease its investment in Vaca Muerta, Robertson answered: «Welike the rock. That’s first and foremost. Drilling costs arecoming down and the well results so far were sufficient towarrant additional investment.» (Additional reporting by Ernest Scheyder in New York; Editingby Paul Simao)
