Argentine province launches hydrocarbons block auction

Argentine province Río Negro has kicked off an auction process for two hydrocarbons blocks.

The move comes after upstream firm Pilgrim Energy presented a private initiative project to explore for gas at areas Jagüel de los Milicos (21.6km2) and Angostura (396km2).

Earlier this month, the provincial government declared the project of public interest and authorized the launch of the auction, for the rights to explore the areas and eventually extract, transport and sell hydrocarbons produced there. 

One of Argentina’s smaller hydrocarbons firms, Pilgrim was granted preferential rights to improve its eventual bid, if necessary, and in turn secure the acreage.  

Outlay over two planned exploration phases could total more than US$20mn.

According to energy department operator data, Pilgrim produces oil and gas in Chubut province. 

Río Negro is Argentina’s seventh-biggest gas-producing jurisdiction, registering 3.3 million cubic meters per day (conventional and tight) in June, compared with the 104Mm3/d logged by No. 1 producer Neuquén province. 

Bids are due by November 15, according to a provincial government notice. Bid opening is scheduled for the same day.

In related news, local media outlet EconoJournal said Neuquén province was negotiating with upstream firms over potential new Vaca Muerta unconventionals concessions, eventual deals that could involve investment in midstream infrastructure or roads in exchange for acreage rights. 

Midstream infrastructure projects could potentially apply for benefits under the federal government’s Rigi investment incentives regime.

The bulk of upstream investment is being pumped into Neuquén, which sits over the biggest chunk of Vaca Muerta.

More information on the Río Negro process is available here