Argentina’s Shale Industry Makes Progress, But No Boom Yet

Argentina Rig Argentina is advancing in its mission to become the largest shale oil and gas producer outside of North America. But well economics still challenge the industry, despite heavy price supports from the government. While production from conventional wells in the Neuquén basin has steadily declined, tight gas production has almost tripled over the past two years with an average of 18 new wells drilled per month in the basin, reaching 565 mmcfd (16Mm3/d) during the first quarter of 2016. As drilling and completion costs vary across the basin, estimated ultimate recovery (EUR) may play a greater role in well economics than reducing costs, where only outstanding wells break even at the incentivised US$7.50 /MMBTU according to the latest Wood Mackenzie analysis . After years of decline in natural gas production, Argentina has been rejuvenating the local industry by offering higher prices on output from new developments. The […]

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