Ricardo Ferreiro, the President of E&P, spoke in the city of Neuquén at Summit Energy 2024, hosted by the Argentina-Texas Chamber of Commerce, sharing key insights on the present and future of oil and gas.

“Thank you to everybody for being a part of this.” The energy and potential of Vaca Muerta are at a high point, and it showed: “A dream has become a reality already in motion. Now it’s up to us to create the conditions enabling us to shift gears quickly and maximize Argentina’s opportunities and resources,” began Ricardo Ferreiro, President of E&P. He was speaking to a packed auditorium at the Hilton Hotel in Neuquén, during the most recent meeting of the Argentina-Texas Chamber of Commerce, on Monday, October 21.

What’s the current situation for Vaca Muerta operators? “With abundant reserves of exceptionally high quality, these are highly competitive operators, who are world-class in this area and excel in drilling efficiency, branch extension, production per well, and fracture intensity.” However, there’s no denying the impact of the challenge lying ahead: evacuation capacity is maxed out. “We’re at the threshold of a major qualitative leap, requiring substantial additional investment. Both gas and oil plays demand further infrastructure and development efforts.”

Gas has moved beyond meeting local demand and operators are now eyeing regional markets. There’s still much to be tackled with gas pipelines and infrastructure: securing Argentina’s domestic supply, sustaining current exports, and expanding opportunities in northern Chile and Brazil via Bolivia.

Furthermore, "there’s an urgent need to develop an LNG (liquefied natural gas) project to fully tap into these reserves, which demands significant time and investment." Fortín de Piedra remains the prime example of opportunities and capabilities when aligned can drive major projects. “Currently, peak winter output levels are hitting 24.4 million cubic meters, backed by an investment of over USD 4 billion.”

This is why the LNG project is so critical, as it has the ability to unlock the potential of Vaca Muerta reserves and put Argentine gas on the global stage. “Alongside the PAE initiative, we must also highlight YPF’s larger-scale project, aligned with Vaca Muerta’s estimated 300 TCF (trillion cubic feet) of reserves. Additionally, there are other major projects in the pipeline, such as the production of fertilizers and urea.”

Vaca Muerta and what’s next

There’s another side to Vaca Muerta: the untapped potential of its resources. “We have the expertise, the skills, and the operators. Now, it’s time to expand,” he noted. Conditions like the recently introduced Regime of Incentives for Large Investments (RIGI in Spanish) are paving the way, but the leap in infrastructure remains crucial. On the pipeline front, several projects are already in motion, including Oldelval’s Duplicar project and the Vaca Muerta Sur initiative, both of which are progressing well but requiring continued support to reach their full potential.

This is Tecpetrol Oil’s moment: “We are developing a project at Puesto Parada which we’re aiming to launch in mid-December, with a potential of 20 thousand barrels/day, and we’re derisking the first stage of Los Toldos II Este. “We’ve drilled four appraisal wells in Los Toldos I Norte, and the results have exceeded our expectations,” explained Ferreiro. “Now, we face the additional challenge of building out logistics for the northern hub to support those fields, which will be managed from Rincón de los Sauces.”

There are certainly the right conditions for it: “The highlight of the year’s final stretch is the addition of F36, a new drilling rig from Nabors Industries. This advanced rig enhances decision-making through direct integration with our RTOC control room, marking a qualitative leap in safety, efficiency, and technology. However, there are still considerable infrastructure challenges ahead: developing roads, logistics routes, electrification, and water networks is essential to enable the intensive growth of Vaca Muerta.

The talk came to an end, showing how the past is the consequence of the present and an pointer to the future: one key takeaway is that whatever happens, there’s always room for youth. “We rolled out the GenEra Neuquén educational project in partnership with Vista, boosting math and technical training for 1,200 participants in Neuquén, delivering over 40,000 hours of courses. Our commitment also extends to supporting the Gregorio Álvarez scholarships awarded by the Neuquén government in addition to our own Roberto Rocca Scholarships, which we’ve been awarding since 2014 to promising young students in communities near our operations. This collaborative approach is crucial. The future holds far greater opportunities than anything we’ve achieved so far.” Ferreiro finished with a call to action: “Let’s collaborate, share, and drive forward the development of Vaca Muerta together.”