A map showing the location of El Manzano bloc in Mendoza.
Adds 15 million barrels of crude to firm’s reserves
YPF has discovered a new conventional oil well in the western Mendoza province, which will add 15 million barrels of crude to its reserves.
Initial production at the El Manzano bloc is expected to be around 535 barrels per day, the company said yesterday.
The discovery would imply a 2.5 percent increase in the company’s proven reserves at the end of last year, considering the company’s total declared reserves in its 2012 annual report were of 590 million barrels of oil.
Yet the significance of the find goes beyond raw numbers, demonstrating how conventional discoveries continue to be an important part of YPF’s portfolio at a time when much of the attention from the media and the industry as a whole is on the country’s potential in unconventional resources, particularly those located in the Vaca Muerta formation.
“This achievement is the result of an aggressive exploratory plan that YPF put in place with the objective of increasing Argentina’s hydrocarbon resources,” YPF said yesterday in a news release.
“Exploratory activity in Mendoza has seen significant growth, a result of the intense work that YPF has been carrying out in the province,” said Carlos Colo, YPF’s executive manager of exploration. “This new discovery, added to others recently carried out in the Vizcacheras and Chachahuen blocs, is a milestone for this new YPF management.”
The discovery took place in the Mirador del Valle x-1 well that is 1,789 metres deep.
President Cristina Fernández de Kirchner signed the expropriation of 51 percent of YPF’s shares from Repsol in May of last year.
Since then, the company has been seeking out private partners to help it finance part of its ambitious US$32.6 billion five-year plan that it unveiled shortly after last year’s nationalization.
In July, YPF sealed a landmark $1.24 billion deal with Chevron to explore for shale oil in the Vaca Muerta formation.
Later, it signed deals with US company Dow Chemical and local firm Pampa Energia, both of which have been focused on producing natural gas.
When it took over majority control of YPF, the Fernández de Kirchner administration said it would seek to reverse years-long declines in production that have forced the country to pay an ever-increasing bill for energy imports.
In September, YPF was able to break the trend of declining production, reporting a 5.2 percent increase in oil and a 3.6 percent jump in natural gas output, compared to the same month last year.
Yet that increase was not enough to reverse overall declines in domestic production across the country. Crude production declined 2.2 percent in September, compared to the same month last year, while natural gas output dropped 4.8 percent over that same time period.
Meanwhile, the import bill continued to increase as the value of energy imports rose 14 percent in September to US$651 million, adding up to a total of US$6.68 billion in the first nine months of the year, a 33 percent increase from the US$5.03 billion seen in the January to September period of last year.
buenosairesherald.com