Vaca Muerta oil driller preparing to export across Andes

Argentine hydrocarbons firm Vista Energy is preparing to export oil to Chile via the Otasa pipeline, infrastructure that is being brought back into service.

Vista officials expect 4,000-5,000b/d of company crude to start flowing through the trans-Andean duct this quarter.

CEO Miguel Galuccio told the company’s Q1 results call that the pipeline was “being tested as we speak” and that contracts would likely be firm.

Argentine state-controlled hydrocarbons company YPF, which along with Chilean counterpart Enap and a unit of US player Chevron holds the Otasa concession, recently said it expected Argentine exports to, and potentially through, Chile to resume in May, targeting a dispatch rate of 70,000b/d by the end of the year.

Galuccio said that dispatching oil to Chile would permit the company to reduce volumes currently transported by road and that Otasa netback prices would be similar to those for oil exported via the Bahía Blanca terminal on the Atlantic coast. In a context of strained domestic pipeline capacity, Vista is dispatching around 2,500b/d by truck, which negatively impacts costs.

“Clearly this new route, these exports to Chile, will help with both exports and costs,” Galuccio said.

The Chilean offtaker is Enap, which owns 100% of local refining capacity. With only limited domestic hydrocarbons production, in southern region Magallanes, Chile is a net importer of oil and gas. 

Argentina’s government last quarter unveiled an associated regulatory regime tailored to cross-border hydrocarbons infrastructure. 

Vista oil production was 44,000b/d in 1Q23, up 24% year-on-year as the company pumps resources into fields in the Vaca Muerta shale play in the Neuquén basin. Vista’s key assets are areas Bajada del Palo Oeste and Aguada Federal. The company's gas output slid 1% year-on-year to 1.23Mm3/d, a fraction of the roughly 130Mm3/d produced overall in the country. 

For 2026, oil-focused Vista aims to be pumping out at least 80,000boe/d, up from 48,600boe/d in 2022. Guidance for this year is 55,000boe/d, with an exit rate of 60,000boe/d.

Vista is exporting more than half of the oil it produces, spurred by favorable export prices and a lack of unmet demand from local refiners. The company has filed a request with the government to access around US$66mn under a scheme – via decree 277 of 2022 – that allows producers to exchange for dollars a proportion of revenue obtained from a portion of additional output. Vista officials are waiting for associated certificates to be issued, the call was told.

Last quarter, the company obtained an average realized oil price of US$65.9/b on the local market and US$69.8/b on the export market, net of export tax. Vista exported about 30% of its gas to Chile, obtaining US$8.9/MMBTU, compared with the US$3.0/MMBTU fetched locally from sales to industrial customers. 

Nationally, oil production climbed 9.9% year-on-year in January to 99,600m3/d (626,465b/d), according to data from energy think-tank the General Mosconi institute. Growth is being driven by the unconventionals segment, where output expanded 30.0% year-on-year to 46,000m3.

Argentina is working on two major midstream oil projects – the Otasa duct recommissioning and an expansion of the Oldelval domestic pipeline and associated terminal capacity – to debottleneck production at the Neuquén basin, support output growth and tap export markets. 

Exports via Otasa had been halted in October 2006 because its use had declined from 115,000b/d at its peak to around 35,000b/d, making its operation economically unviable.