Argentina extends Equinor-YPF offshore exploration license

The Argentine unit of Norwegian state-owned hydrocarbons firm Equinor and its local counterpart YPF were granted a one-year extension to an offshore exploration license issued in 2019.

The license corresponds to area CAN-102, deepwater acreage off the coast of Buenos Aires. A previous one-year extension had been granted in May.

A public consultation process on a planned 3D seismic campaign at CAN-102 got underway in November.

According to a YPF presentation, Argentina has 31Bboe (billion barrels of oil equivalent) potential offshore hydrocarbons resources, compared with the estimated 29Bboe in the onshore Vaca Muerta unconventional formation. 

A proposed Equinor exploration campaign targeting other areas, CAN-100, CAN-108 and CAN-114, did not advance as planned last year following court injunctions – that were later lifted – blocking the work. 

Exploration was carried out in shallower waters offshore Buenos Aires, in the Colorado basin, from 1969-97, with 18 exploration wells drilled. Oil was extracted from one during repeat formation testing.

Hydrocarbons, chiefly gas, are currently produced offshore Tierra del Fuego province in the Austral basin, where a consortium last year announced a final investment decision on the Fénix gas project. 

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Regional development bank CAF approved a US$540mn midstream hydrocarbons loan for Argentina.

The funds are earmarked for flow-reversal work on gas pipeline Gasoducto Norte, a project that has an overall price tag of US$702mn, CAF said in a statement. 

Work, involving gas transporter TGN, includes construction of duct La Carlota-Tío Pujio. Argentine gas regulator Enargas is tasked with including work in TGN's mandatory investment plan. 

The project would allow production from the Neuquén basin to reach some central and northern zones and, eventually, Chile, Bolivia and Brazil. Argentina already exports gas to Chile and Brazil.

The flow-reversal project is linked to the under-construction Vaca Muerta gas pipeline, being built to debottleneck production in the Neuquén basin, expand coverage and support exports.

Gas from Neuquén basin – where output is trending up – would help substitute imports from Bolivia, which have been trending down, and help offset declining production at Argentina’s Noroeste basin.

An idea being mulled in Argentina is one day exporting to Bolivia and piping gas to Brazil via the Andean nation.

“Because of its multilateral nature, the gas duct is of great interest to Caf, since, once finished, we can reverse the Bolivia pipeline so that, instead of importing, we can consolidate exports to neighboring countries,” economy minister Sergio Massa said in a tweet.

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Argentina’s federal energy department met with upstream and midstream hydrocarbons firms to launch a public-private working group that will focus on infrastructure needed to increase oil and gas exports in the region.

Members said overhaul, flow-reversal and expansion work was needed, along with construction of new infrastructure, to support an increase in exports. One sub-committee will look at the oil sector, the other gas.

“We want to listen to [sector companies], help them, and that they help us achieve the objective of establishing lines of action to expand and build new infrastructure for the exportation of our hydrocarbons,” federal hydrocarbons chief Federico Bernal said in a statement.

Argentina, ramping up gas production and already expanding midstream infrastructure, is poised to play a central role in the processes of energy transition and integration in South America. Gas producers are keen on firm year-round exports to regional neighbors Chile and Brazil and, eventually, exporting overseas via liquefaction plants. An Argentina-Chile oil export pipeline is being brought back online.