Argentina roundup: YPF-Eni LNG, PAE Chubut shale gas, Bentia Energy acreage

YPF LNG

Argentine state-controlled hydrocarbons firm YPF and Italy's Eni signed an MOU on LNG.

The development comes just days after YPF presented its three-phase project, Argentina LNG, to investors.

The MOU involves a 12Mt/ty phase that entails installing capacity offshore Río Negro province via two units, a statement said.  Areas covered under the MOU are upstream, transportation and liquefaction. 

An objective of LNG projects is further monetization of the huge volumes of gas within the Vaca Muerta unconventionals formation. 

"We are very pleased to sign this agreement with Eni, which would allow us to accelerate the timeline for the Argentina LNG project," YPF CEO Horacio Marín said in a statement. "We see great interest worldwide, both from large production companies and from countries seeking to purchase gas from Vaca Muerta."

According to the YPF investor presentation, the third and final phase of Argentina LNG involves installing the 12Mt/y capacity. Overall, Argentina LNG envisages total capacity of about 28Mt/y by around 2029.

YPF is poised to enter the LNG arena via a tolling agreement. YPF is involved in a project led by Pan American Energy and Golar LNG. Today, the project also involves Pampa Energía and Harbour Energy. As things stand, Argentine LNG exports are due to start in 2027 via the project.

The MOU also encompasses offshore exploration collaboration. 

Pan American Energy

Pan American Energy (PAE) has discovered shale gas at the Cerro Dragón block in Chubut province, in the Golfo San Jorge basin, and has converted the acreage into a nonconventional extraction concession after being given the green light by authorities.  

Conventionals have been extracted from the area for decades.

The company carried out seismic data analysis and drilling work, targeting the D-129 formation.

Investment of US$250mn in tertiary recovery work is planned. 

PAE said in a statement: "The company confirmed the presence of shale gas in Cerro Dragón and obtained authorization from the province of Chubut to convert the area into an unconventional hydrocarbon exploitation concession, while also being allowed to carry out complementary conventional activities."

PAE group CEO Marcos Bulgheroni said: "For the past 70 years, we have been making sustained investments in the San Jorge gulf, and our work has helped turn Cerro Dragón into the largest conventional hydrocarbon-producing area in the country. Today, we are the first to explore the basin with a shale objective, and we are confident in our ability to develop it."

The bulk of upstream investment today is being pumped into Argentina's unconventionals crown jewel, the Vaca Muerta shale play in Neuquén province, and YPF has been divesting mature conventionals assets in the jurisdiction and elsewhere. 

According to operator data from industry chamber IAPG, area Anticlinal-Cerro Dragón produced 10,833m³/d oil and 5.94Mm³/d gas in January. 

Bentia Energy

Neuquén province authorized YPF to cede 100% of its rights and obligations in two hydrocarbons licenses to Bentia Energy.

Under the agreement, Bentia acquires Al Norte de la Dorsal (221km²) and Octógono Fiscal (72,28 km²), which constitute the so-called Neuquén Sur cluster offered under YPF's Proyecto Andes mature conventional assets divestment program. 

Bentia plans to carry out pulling, repair and abandonment work at wells, among other activities, Neuquén's provincial government said in a statement. 

The transfer of other areas, constituting the Neuquén Norte cluster, has also been approved. Bentia is operator with a 70% stake and Ingeniería Sima controls the balance of Señal Cerro Bayo (72km²), Volcán Auca Mahuida (255km²), Don Ruiz (109km²) and Las Manadas (85km²).

"This planning is aligned with the current conditions of the conventional clusters in Neuquén Sur and Neuquén Norte, where the focus is on maintaining activity through cost rationalization, the gradual adaptation of facilities and interventions in existing infrastructure. This approach allows for the recovery of production volumes, the development of reserves, and the gradual release of areas for other uses or future exploitation," the government added.