Roundup: Offshore extension, Vaca Muerta plans, oil pipeline, hydrogen regs

Offshore exploration

The Argentine unit of Norwegian oil company Equinor was given additional time to complete 3D seismic acquisition work at Malvinas Oeste basin block MLO-121 offshore Tierra del Fuego province.

The company had been given the environmental green light in 2023 to explore the area along with Austral basin offshore acreage AUS-105 and AUS-106.

Unfavorable weather forced the company to halt MLO-121 project activity during the Southern Cone’s winter, with the goal of resuming work in 4Q24 and achieving completion in February 2025, a notice published by the federal energy department states.  

“In its reports, the company states that the project continues to maintain the same operations and activities as previously declared and does not present significant changes, except for what pertains to the operations area, which will now be primarily limited to MLO-121,” it says.

The previous exploration window ran from March-August 2024. The resolution approves a new window, from September 2024-February 2025.

In terms of its offshore exploration portfolio, Equinor holds either full or partial stakes in eight blocks. These are located across the Argentina Norte (CAN-100, CAN-108, CAN-114, CAN-102), Malvinas Oeste (MLO-121, MLO-123) and Austral (AUS-105, AUS-106) basins.

This year Equinor was authorized to offload a 25% chunk of its 100% stake in AUS-106 to CGC Energía. Equinor was also given the green light to offload a quarter of its 100%-owned license for AUS-105 to the same company.

Offshore Buenos Aires province, at Argentina Norte basin block CAN-100, Equinor drilled Argentina’s first ultra-deepwater exploration well, which was considered dry. Block partners are state-controlled YPF (35%) and Shell (30%).

Shell Vaca Muerta plans

Shell Argentina plans to increase oil production 40% next year to 70,000b/d, local media outlet Más Energías reported, citing comments made by company president Germán Burmeister during an event held to mark 110 years of operations in the country.

In line with other drillers like YPF and Vista Energy, the focus is shale oil at the Vaca Muerta unconventional hydrocarbons formation.

Shell invests up to US$600 million a year in Argentina, a sum that could grow “in the short term” if capital controls are eased, he said, also referring to the government’s Rigi investment incentives regime.

Proposed Shell projects include midstream infrastructure.

Argentina is easing state control over the economy in areas such as oil, where local prices have been falling into line with international prices after years of intervention.

In related news, Shell was granted the environmental green light to shoot 3D seismic at Argentina Norte blocks CAN-107 and CAN-109.

Work could be carried out between December 2024 and March 2025, Más Energía reported. 

The project was submitted by TGS Investments, which operates in Argentina as Nopec Geophysical.

YPF

YPF is due to end within two weeks a call for parties interested in securing capacity on its planned US$2.5 billion Vaca Muerta Sur oil pipeline, which will carry Neuquén basin oil to a future export terminal on the coast of Río Negro province.

So far two companies have signed letters of intent, local media outlet EconoJournal reported.

Producers are applying for a share of capacity on the planned infrastructure, the company’s last results call was told. Letters of intent corresponding to about two-thirds of total project transport capacity had been signed, investors heard at the time.

The US$200mn first phase of the project – a 130km link between Loma Campana in Neuquén province and Allen in Río Negro – has got underway. 

The second phase, due to tap Rigi benefits, would be driven forward by an SPV, with stakes linked to amount contributed to the construction cost. 

The goal is launching exports from Río Negro by the end of 2026.

Chile green hydrogen plan

Chile’s government presented on Thursday a green hydrogen regulation working plan, inked by energy, transport, mining, public health, economy and housing and development officials. 

A joint signed declaration states they commit to “developing the sectoral regulations associated with the green hydrogen value chain for the creation of enabling conditions for the materialization and sustainable development of this industry in Chile.”

Sixteen regulations will need creating or amending and associated work schedules have been drawn up, an energy ministry statement said. Public consultations will be held and regulation impact reports created.

Chile has a green hydrogen strategy and a 2023-30 action plan.

Derivate green ammonia, for example, is today regulated as a hazardous substance under a framework that doesn’t consider it as an energy vector. Maximum storage capacity and project location are among multiple other areas where work is needed.

Along with adapting regulations, a key challenge not just for Chile but also other nations eyeing the market is getting offtake contracts signed and addressing, in the early years, the price gap between green hydrogen and its derivative and the likes of natural gas.