Surface conditions, a "second field" ripe for Argentine development
Present on behalf of Tecpetrol, Ricardo Ferreiro was a special guest on the TV series LN Energy, A latent opportunity, taking a deep dive into the potential of Vaca Muerta as it stands following the inauguration of the GPNK.
The numbers are impressive. Given the right conditions, Argentina can swing from a deficit of 4 billion dollars in its energy balance in 2022 to a point of equilibrium in 2023—and reach a surplus of 24 billion by 2030. "That’s the extraordinary potential contribution that Vaca Muerta can make to this country," stated Ricardo Ferreiro, Tecpetrol’s President of G&P, Business Development & Commercial. The senior executive was speaking on the La Nación+ TV business channel as a guest on Energy, the latent opportunity, a special cycle bringing together some of the leading players from the industry with market experts to analyze the significance of the recent inauguration of the GPNK1 stretch for the country and for the industry.
Ferreiro was joined by colleagues Rodolfo Freyre, Vice President of Gas, Energy and Business Development of Pan American Energy and Matías Weissel, Operations Manager of Vista Oil & Gas, on the panel entitled "Corporate leadership strategies in the sector." Ferreiro began by outlining the many achievements notched up by Tecpetrol over the last few years. "Industry sees what we achieved in Fortín de Piedra as a strong display of Vaca Muerta's potential," he pointed out in conversation with LN+ interviewer Sofía Diamante.
"Natural gas is a complement, an ally and a necessity for the energy transition," Ferreiro defined.-
The field, which is currently the single deposit producing the most gas in Argentina, went from 0 to 17 MMm3/d in just 18 months. Today, its potential is estimated at 23 MMm3/d, making it the largest shale gas producer in Vaca Muerta. "It's a combination of oil know-how combined with our technical genes and the experience of our Group as a whole," he opined. "This was a significant boost for gas production, and the ensuing growth in output meant that it made increasing sense to build a gas pipeline. That’s the great contribution that Fortín de Piedra has made to this development, and explains our enthusiasm for further development in this area."
Based on data provided by Matías Weissel, who underscored Vista's commitment to achieving net zero carbon emissions by 2026, the energy transition soon took center stage on the agenda. Each company representative brought up and discussed the profiles of their different projects. "There is clearly an industry-wide consensus that operations need to be cleaner on an ongoing basis," said Weissel, calling gas "the bridge to beyond 2050."
Ferreiro picked up the ball, saying that gas is "a complement, an ally and a necessity for the transition." He added that, "it’s been demonstrated that there is no need to choose between one type of energy or another, as much due to the growing importance of energy security in this context, as to the fact that because the transition is going to take longer than initially estimated, energy sources must be able to complement each other."
As for controlling emissions and targets, he referred to Tecpetrol's Emissions Intensity scores of 12.5 tCO2-eq/Kboe compared to the industry average of 23 tCO2-eq/Kboe, and mentioned the innovative projects being carried out by the company’s Energy Transition Unit.
The potential of Vaca Muerta
The positive trade balance means that "we can stop talking about the potential, and plan the next steps," explained Weissel, in reference to both oil and gas. Rodolfo Freyre, VP Gas, Power & Business Development at Pan American Energy, pointed out that PAE has been consistently exporting from the Gulf of San Jorge without a break. The executive added that, "for three years we’ve been working with Tecpetrol, as we have regained confidence from the Chilean market, to export gas there during winter. The next step is to do so to Brazil, passing through northern Bolivia." He went on to explain that the LNG export market is PAE’s main goal, despite the fact that this involves vast million-dollar projects that have been going on for at least seven years so far.
Ricardo Ferreiro, on the right, Panel about opportunities for the energy industry on the LN channel.
As industry players who have all seen their companies grow recently, the participants shared their view about technical capacity in general. "Competitiveness below ground is guaranteed, in terms of productivity, rock quality, drilling and completion efficiency," defined Ferreiro, who highlighted the competitive prices achieved by the State as part of the Gas Plan contracts for internal supply.
"Now we have to work on the above-ground conditions, such as respect for contracts, access and free availability of foreign currency, legal and regulatory stability, a coherent energy policy and positive macroeconomic conditions." In the right scenario, by 2030, Argentina could be producing 1.4 million barrels of oil and 240 MMm3/d of gas, with an LNG project underway, which Ferreiro described as tantamount to the contribution of a "second field."
As he put it, “2023 is the year where we see where we are, and where we believe we can go."
"The GPNK has shown us the sheer size of its potential; it’s a catalyst," concluded Ferreiro. "If we have a positive energy balance of the size we’ve been talking about, this will clearly be a very powerful boost to help us solve other macro problems."