VACA MUERTA (Argentina)
Early-summer winds howl over the semi-arid plains of southern Argentina’s Neuquen province, beside the towering Andes, where the land holds riches from dinosaur skeletons to oil and gas.
“This is most massive challenge in the energy sector in Argentina’s entire history,” Martin Costa, 36, an engineer with state oil giant YPF, said of the Vaca Muerta formation.
Beneath Vac Muerte – ‘Dead Cow’ – are huge oil and natural gas reserves. It is now the number one shale oil production site outside the United States.
YPF has just drilled its 967th well in this Patagonian outpost, a sort of El Dorado of shale oil and shale gas.
“Working Vaca Muerta is really a big responsibility. It is not like drilling at the bottom of a lake somewhere. You have got to go down 3,000 metres below the surface, then shatter rock, and then try to control costs,” Costa explains.
The area where YPF works with the US firm Chevron -- called Loma Campana -- covers just one per cent of the more than 30,000 square kilometers of Vaca Muerta.
But it has 270 wells online and production is already at 21,000 barrels per day.
The closest town, tiny Anelo, doubled its population in just three years -- to 6,000.
Across the sprawling area, massive YPF trucks rumble in an endless parade, carrying containers belonging to massive oil services firms such as Halliburton and Schlumberger. On the heels of the 1980s boom, Neuquen province -- in Argentina’s southwest -- is seeing its second black gold rush.
Although the winter cold can be bitter -- 10 below zero Celsius -- jobs extracting, processing and transporting shale oil and shale gas can earn double, triple and even four times what they would in Buenos Aires.
From a simple solderer to managers, it is a big money opportunity in a land of few that compare.
Costa, on site as head of drilling, plans to bore six wells in an area of a few dozen square meters in YPF-Chevron’s bloc 121.
It features futuristic mobile, cutting-edge drilling platforms called Walking Rigs.
Weighing in at more than 100 tonnes, they rise about 40 meters high, and pound a 1,500-kilo bore a staggering 350 meters into the earth.
Lurching and thumping in this spare and dramatic landscape, they have a kind of sci-fi, post-apocalyptic edge -- and because they move along on a rail, workers don’t have to take them apart and reassemble them to move on to a new test site. That cuts costs.
Then fracking units get into gear pumping cement down with enormous pressure, to give the well some stability.
YPF is comparing Vaca Muerta’s potential to the biggest similar reserves in the US -- in Eagle Ford, Texas, and its output of 800.000 mb/d.
Argentina produces 500,000 barrels of oil per day. Now, it is looking to nonconventional assets to push it over the divide between a net energy importer and an exporter.
In recent months, oil prices have been falling to lows that had not been seen for years. But that has not discouraged YPF.
“We are not drilling these wells thinking about today’s price of a barrel of oil. We are investing long-term. This is a bet on the future. But that also means that we have to be extremely efficient,” said Pablo Bizzotto, Vaca Muerta’s manager for shale oil and gas.