Argentina roundup: US$1.4bn Oldelval pipeline, YPF acreage transfer, Mendoza upstream push

Oldeval duct

Oil pipeline concessionaire Oldelval was due to cut the ribbon Friday on its US$1.4bn Duplicar debottlenecking project.

The duct increases capacity between the Neuquén basin, home to the Vaca Muerta shale play, and Atlantic coast export facilities.

Following the work, Oldelval can pipe 540,000b/d, up from 225,000b/d, with all new capacity geared to exports.

Oldelval has an associated US$838mn development-phase project, Duplicar Norte, designed to expand dispatch capacity from fields in the north of Vaca Muerta. 

In parallel, initial work has got underway on Vaca Muerta Sur, a multibillion-dollar project to carry Neuquén basin oil to the coast of Río Negro province and led by a consortium of seven companies.   

US President Donald Trump slapped a 10% tariff floor on imports of Argentine products but, for now at least, has exempted oil and other commodities.

Santa Cruz acreage transfer

State-controlled oil firm YPF and the province of Santa Cruz signed an MOU concerning the transfer of 10 conventional hydrocarbons areas in the jurisdiction.

Under the accord, the parties commit to reach a definitive agreement whereby Santa Cruz provincial firm Fomicruz will take over the assets and associated transport infrastructure. An environmental cleanup plan is also proposed.

The blocks involved are Cerro Piedra-Cerro Guadal Norte, Barranca Yankowsky, Los Monos, El Guadal-Lomas del Cuy, Cañadón Vasco, Cañadón Yatel, Pico Truncado-El Cordón, Los Perales-Las Mesetas, Cañadón León-Meseta Espinosa and Cañadón de la Escondida-Las Heras.

Today, the bulk of upstream investment in being pumped into Neuquén province, which sits over the lion’s share of Vaca Muerta.

YPF is heavily focused on shale oil and has been divesting mature conventional assets. 

Mendoza investment plans

Mendoza province extended for 10 years hydrocarbons extraction licenses corresponding to areas Altiplanicie del Payún, Cañadón Amarillo and El Portón.

Mendoza sits over a sliver of Vaca Muerta and US$44mn in work is planned, at Cañadón Amarillo, to explore for unconventionals. Work includes 3D seismic acquisition and the drilling of one vertical and two horizontal wells. 

Depending on exploration results, up to US$1.35bn could eventually be deployed to fully develop the acreage, Mendoza said.

A US$10mn gas storage project, at El Portón, is also part of the extension. The aim is to inject surplus gas during the summer and extract it when the temperatures drop and demand climbs. 

Altiplanicie del Payún, Cañadón Amarillo and El Portón are among six collectively known as Mendoza Sur, offloaded by YPF under divestment plan Proyecto Andes.

Last month Mendoza greenlit the transfer, from YPF to consortium Quintana-TSB, of areas Chihuido de la Salina, Chihuido de la Salina Sur, Altiplanicie del Payún, Cañadón Amarillo, El Portón and 14.4% of area Confluencia Sur.

Mendoza also recently authorized a 10-year extension of Cuyana basin extraction licenses for blocks Barrancas, Vizcacheras, La Ventana and Río Tunuyán. The deal secures associated committed investment of around US$600mn in the areas, which account for some 25% of the jurisdiction's production, or 2,200m3/d (13,837b/d). They are part of six YPF areas transferred to Petróleos Sudamericanos: Barrancas, Vizcacheras, La Ventana, Mesa Verde, Ceferino and Río Tunuyán.

Also under the banner of Proyecto Andes, last year Mendoza authorized the transfer of YPF assets Llancanelo and Llancanelo R to upstream firm PCR. Associated investment commitments are up to US$120mn. 

In Mendoza, YPF is exploring for unconventionals at CNVII A and Paso de las Bardas Norte, where two pilot wells have been drilled and more exploration work is planned, a press release said.