Driller confirms Q1 target for trailblazing Argentine offshore pilot well

Norwegian hydrocarbons firm Equinor told BNamericas that plans remain in place to drill a pilot well offshore Buenos Aires province this quarter. 

The company's local unit, working with Argentine state-controlled oil firm YPF and the Argentine unit of Anglo-Dutch giant Shell, is targeting the CAN-100 block in the Argentina Norte basin.

Dubbed Argerich-1, the project will be Argentina's first ultra-deepwater well and constitutes the start of a new chapter in the country's offshore hydrocarbons story. Currently, all offshore hydrocarbons are produced further south, in the Austral basin.

“We plan to start the Argerich-1 well by the end of Q1, pending rig availability,” Equinor told BNamericas via email. “It’s estimated that the drilling operation will take around 60 days.”

The acreage is estimated to have recoverable resources of 1Bboe (billion barrels of oil equivalent). An associated 3D seismic shoot got underway a few months ago and is due for completion soon.

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

Equinor, meanwhile, was also recently given the green light to carry out seismic work at Austral basin blocks AUS-105 and AUS-106 and Malvinas Oeste license MLO-121. 

Offshore contracts were awarded in a 2018-19 licensing round, which resulted in Argentina awarding 18 areas to nine groups of companies, with associated investment of US$724mn and surface area of 94,834km2. Argentina had offered 38, across the Malvinas, Argentina Norte and Austral basins.

According to a YPF presentation, Argentina has 31Bboe potential offshore hydrocarbons resources, compared with the estimated 29Bboe in the onshore Vaca Muerta unconventional formation.

In operation for around 40 years, the Austral basin produced 20.2Mm3/d (million cubic meters per day) of gas in 2022, about 15% of national output, and 7,246b/d oil, about 7.5%. The chief player is the CMA-1 consortium, building the 10Mm3/d Fénix gas platform. An Enap-YPF consortium also produces offshore in the basin. 

An economic reform presented last month by libertarian President Javier Milei contains a series of measures easing state control over the hydrocarbons sector as well as a special incentives regime for large projects in multiple sectors including oil and gas. The draft legislation also affirms contract lengths of 30 years for offshore extraction licenses but scraps a 10-year extension option in place.

In related hydrocarbons sector news, Río Negro province authorized driller Petróleos Sudamericanos to revert to the State part of oil and gas block Barranca de los Loros. The company said it had failed to find extractable hydrocarbons in the area and that the unwanted portion of the block was urban and/or agricultural land.