“To develop Vaca Muerta we need innovation, scale, productivity and management control”
In an informal virtual chat with young people studying different engineering degree courses in the region, the CEO of Tecpetrol discussed the challenges arising in the energy market, as well as Argentina’s potential to spearhead the development and integration of the energy grid from a regional perspective.
On May 12, over 1,000 students and graduates from across the region—Argentina, Colombia, Ecuador, Mexico, Peru and Venezuela—logged on to hear a live talk given by the CEO of Tecpetrol, Ricardo Markous, who was accompanied on this occasion by Yamila Moyano, the Production Supervisor at Los Bastos field, and Fernando Bardelli, a reservoir geologist.
“At a global level, the war in Ukraine has had major impact on all aspects of the energy industry, making itself felt around the world, and in Latin America. In this context, the vast availability offered by the reserves in Vaca Muerta represents a significant responsibility to develop them urgently so that we can help to mitigate the shortages suffered by other countries,” said Ricardo Markous in his opening words.
He then gave an overview of current energy prices, with a vision of his projections for growth in supply and demand. “The energy transition is on track, but we are also seeing that the demand for oil for the next twenty years will be similar to what it is today, just a little less. Only then will it begin to taper off. This means that oil and gas will be needed for the next few years, and there are not many places where such investments can be made.” In this scenario, gas has an essential role to play: "Natural gas is a vital component of the energy transition because it is less polluting than coal and oil, and because there is an abundant supply of resources."
Argentina’s location in the shale world
Markous explained that Vaca Muerta in Argentina is the third-largest shale gas play in the world, with estimated recoverable reserves of 802 trillion cubic feet a year (tcf/year), and the fifth-largest for shale oil, with 27 billion barrels. “These are truly vast reserves compared to this country's consumption, which is approximately 2 tcf/year. Despite having Vaca Muerta, both for gas and oil, in Argentina at the moment we need to import hydrocarbons for some USD 8.512 billion a year.”
When asked what should be done with all the gas from Vaca Muerta, Markous emphasized that it needed to be exported to neighboring countries such as Chile and Brazil, to replace the gas that Bolivia is not producing. Furthermore, as there already is an existing gas pipeline in operation (the Gasoducto Norte pipeline), what needs to be done is to reverse the flow. Added to this, the government is putting out a tender to build a new gas pipeline, a positive sign that will help channel the expected growth in output.
According to Markous, “there are large-scale energy projects underway in Argentina. The gas pipeline is already happening, but we also need oil pipelines to be built because the productivity of the Vaca Muerta oil wells is excellent, for both gas and oil, on a par with or even better than the wells and bedrock in the United States.” A new pipeline requires an investment of some USD 700 million, while an LNG plant to extract gas, propane, butane, ethane and other liquids required to condition the gas requires investments of nearly USD 2 billion. "If all this were developed and executed, we could attract significant amounts of foreign currency to the country, and it would also have an impact in terms of job creation."
In addition, Markous mentioned that Argentina is looking to export gas to Europe, which means building a natural gas liquefaction plant, involving an investment of USD 8 billion.
Markous summed up the potential of the investments like this: “Argentine agricultural exports, depending on the price of commodities, bring in between USD 20 and USD 30 million. Vaca Muerta could become the equivalent of one or two Argentine farms within just 10 or 15 years.”
However, for this to become a reality, "we need innovation, scale, productivity, and clearly, we need to be efficient—though management control—because in the gas market, we’ll be competing with the United States and we need to match them in terms of production costs,” affirmed the CEO.
Professional development at Fortín de Piedra
Yamila Moyano, an Industrial Engineer who graduated from the National University of the South in the Argentine city of Bahía Blanca, was up next to share her experience. She joined Tecpetrol as a summer intern in 2019 to carry out cost assistant tasks in the Operations department at the Fortin de Piedra field. She left for a short period and returned a while later to do an apprenticeship at the water treatment plant at Fortin de Piedra, where she spent a year. Later, she rotated to the Production area and finally, as a young professional, joined the Production sector to perform administrative tasks in the Neuquén basin. She is currently the Production Supervisor at the Los Bastos field and is the first woman to hold that position.
In her presentation, Yamila talked about the exponential growth experienced by Fortin de Piedra over the last four years. This upwards curve is not limited to the operations, as these went from two to 62 productive wells, but is also a feature of how the facilities have expanded in tandem with personnel development and training. “I’m really grateful that the project, as well as the internship and young professional programs, enabled me to acquire a thorough understanding of each stage of the process. I was part of the process of change at the company, because, thanks to the challenging objectives set, I was able to see how improvements were introduced and managed within the company, and I was a part of that,” she commented.
Yamila brought up two experiences that accelerated her professional growth process: her participation in the scheduled maintenance shutdown at the CPF plant, and heading up a project to implement a system that fundamentally changed the way in which the company presents operations data, a scheme that is today being used in several different areas.
The value of applying knowledge in the field
Then it was the turn of Fernando Bardelli, who studied Geology at the University of Córdoba, thanks to a Roberto Rocca scholarship. In 2014, he joined Tecpetrol to work at the company’s oil fields in Mexico and Ecuador, before moving to El Tordillo and finally joining the team at the Fortin de Piedra project when it started in 2017. Currently, he is studying specialization in geology at the University of Alberta in Canada.
Fernando discussed some of the initiatives that drove the development of Fortin de Piedra:
- Distance between wells. Historically, companies drilling in Vaca Muerta used well spacing parameters of 400 meters. After an in-depth technical analysis, Tecpetrol decided to reduce this distance to 225 meters, resulting in excellent well productivity and total reserves output.
- Incorporation of the Techint Group’s industrial know-how into the Fortin de Piedra project. The decision was taken to apply the Group’s production control philosophy to the oil industry, this being an area where the organization has considerable experience. "There is a large window of application in the areas of cost monitoring, time savings and technological innovations to make resource exploitation a more efficient exercise," said Fernando. In this way, Tecpetrol reduced drilling times at horizontal wells in Vaca Muerta to ten days, with a direct effect on its field production delivery schedule.
- An improved understanding of how rock behaves when fracturing is taking place enabled the distance between different fracture stages to be shortened. “Not only were we able to drill wells closer together, but we also managed to reduce the fracturing stages between wells. This allowed us to be more efficient with our fracturing processes,” he specified.
Fernando concluded his presentation by inviting young people to join the industry: "There is so much to learn, so many challenges to be solved within the energy industry, and you will definitely be able to pursue an amazing professional career."
The energy transition is our future
Markous returned to the topic of the energy transition and explained that the Energy Transition Unit of the Techint Group, headed up by Tecpetrol, has an investment fund of USD 150 million. They are carrying out work to develop two wind farms in Argentina, a lithium extraction plant in the Argentine province of Salta, at an altitude of 4,200 meters above sea level, and analyzing a range of alternatives related to hydrogen and geothermal energy.
Towards the close of the meeting, a Q&A space was held for students to voice their concerns and questions about the business, the company and the career plans offered by Tecpetrol.