Snapshot: The offshore hydrocarbons push of Argentina, Uruguay and the Falklands

Argentina’s Fénix offshore project is scheduled to produce first gas by the end of the year.

The three project partners – operator TotalEnergies along with Wintershall Dea and Pan American Energy – recently completed platform installation, about 60km off Tierra del Fuego province, in water depth of 70m.

The focus now shifts to drilling three production wells via a jack-up rig that will be temporarily located next to the Austral basin platform.

Fénix is the most advanced among various other offshore initiatives in the country and in neighboring Uruguay and the Falkland Islands.

Part of the gas production concession CMA-1, in which TotalEnergies and Wintershall each hold 37.5% and Pan American Energy the balance, Fénix is expected to pump out up to 10Mm3/d (million cubic meters per day) in a production window provisionally due to close in 2041.

Argentine domestic gas output was 114Mm3/d in December, down 11.3% year-on-year. CMA-1 rigs account for around 18% of national gas production. An Enap-YPF consortium also produces offshore in the basin. 

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

President Javier Milei’s economic reform bill, currently in congress, contains multiple measures impacting the energy sector.

Both Argentina and Uruguay, as well as a company targeting acreage offshore Falkland Islands, have said discoveries offshore West Africa were made in geological formations similar to those off the coast of South America. 

ARGENTINA 

Last month Equinor told BNamericas that plans remained in place to drill a pilot well offshore Buenos Aires province this quarter, known as Argerich-1.

Working with YPF and Shell, Equinor is targeting the CAN-100 block in the Argentina Norte basin.

Argerich-1 would be Argentina’s first ultra-deepwater well. 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 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. 

Elsewhere on the exploration map, YPF has the environmental nod to shoot 3D seismic at CAN-102.

Permitting is also underway for seismic shoots planned by Tullow (MLO-122), Shell (CAN-107 and CAN-109) and TGS (MLO-123 and MLO-124), according to information from the federal environment ministry.

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.

URUGUAY 

Uruguay, which has no domestic hydrocarbons production industry, recently announced bids had now been placed for all seven blocks offered under the country’s open round, held twice a year.

In December, national oil company Ancap signed contracts with APA for OFF-6, Shell for OFF-2 and OFF-7 and YPF for OFF-5, adding that contracts for OFF-4 (APA-Shell) and OFF-3 (Challenger Energy) were also due to be inked. Challenger has signed on the dotted line for OFF-1. 

Offshore exploration in Uruguay gathered pace in 2016 with the drilling, by TotalEnergies, of the first well in around 40 years. Oil and gas shows have been reported, but no commercial discovery made.

FALKLAND ISLANDS  

Development-stage work continues on Falkland Islands hydrocarbons project Sea Lion, with owners Navitas Petroleum and Rockhopper Exploration still targeting a final investment decision this year.

First oil at the North Falkland Basin target is penciled in for end-2026. Gross capex to first oil is pegged at US$1.2bn and peak production at 50,000b/d, which could eventually be ramped up to 80,000b/d.

The government of the British overseas territory told BNamericas that the project would require the environmental green light to proceed and that, if it entered production, hydrocarbons would be shipped directly to market from a floating production, storage and offloading vessel. 

Several exploration campaigns have been carried out around the islands, but commercial production has not started.

The PLO32 license, which hosts the Sea Lion well, was granted to Rockhopper in May 2005. The acreage, and PLO33, were previously held and drilled by Shell.