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Unconventional oil and gas production in Argentina

In addition to the USA, Argentina is one of the most important growth regions for unconventional oil and gas production. Following China, the South American state has the second largest shale gas resources in the world. In addition, Argentina also has significant shale oil resources.

However, the country has only just begun to develop its unconventional resources. Until now, only about 650 wells have been drilled in the largest shale formation named Vaca Muerta. In the long term the government is focusing on expanding domestic hydrocarbon production and, in particular, on developing unconventional resources.

 

Argentina: Country with huge potential

Worldwide shale gas reservoirs
In trillion cubic metre

Worldwide shale oil reservoirs
In billion barrel

Wintershall is participating in this endeavor together with national and international partners. The Kassel-based company has been active in Argentina for almost four decades, where it is involved in the production of hydrocarbons, mainly natural gas. Wintershall has been active in the province of Neuquén for over 20 years. Wintershall is now pairing its success gained from decades of conventional production with its acquired knowledge of the geology and underlying conditions to recover hydrocarbons from the attractive, deeper Vaca Muerta formation.

Vaca Muerta One of the world‘s largest shale gas reserves

Argentine shale gas production is concentrating on the Neuquén Basin in western Argentina. The 173,000-square-meter area borders the northern Patagonian massif in the east and the Andes in the west. Until now, conventional oil and gas production has been carried out in the region; geological studies have also shown significant shale gas and shale oil resources in the Vaca Muerta formation.

The U.S. Energy Information Administration estimates that the recoverable oil and gas volumes in the Vaca Muerta formation amount to about 16.2 billion barrels of oil and 8.7 trillion cubic meters of gas. At a depth of close to 3,000 meters, the formation covers an area of 30,000 square kilometers, which is approximately the size of Belgium. These layers of rock are between 150 and 600 meters thick and have a high organic carbon content.

Expanding Horizons Wintershall as operator in the Vaca Muerta formation

Wintershall has been active in the province of Neuquén for about 20 years and is familiar with the geology and conditions there. The company is now leveraging this knowledge and is focusing on the attractive, deeper Vaca Muerta formation within the blocks.  Wintershall holds interests in the Aguada Federal, Bandurria Norte, Aguada Pichana Este and San Roque blocks. Shale gas or shale oil pilot projects are currently being conducted in all the blocks.

Find out more about the projects in Wintershall’s self-operated Aguada Federal and Bandurria Norte blocks.

 
Aguada Federal Neuquén province

Our first operated unconventionals project.

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Bandurria Norte Neuquén province

Our second operated unconventionals project.

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The Argentinean energy industry

Between 2005 and 2015, oil and gas production in Argentina fell by 12 and 26 percent respectively. Partly because of the lack of investment incentives, the energy-rich country was also transformed during this period from a net energy exporter to importer of hydrocarbons. The Argentinean government estimates that the country requires a total investment amount of up to 240 billion dollars: 150 billion for infrastructure and another 90 billion for the energy and mining industries.

The government is aiming to recover Argentina’s energy self-sufficiency by 2023. According to estimates by the Argentinean consultancy company Abeceb, around 11 billion dollars would have to be invested annually in this sector. In particular, funds are needed to develop the extensive shale gas resources. In December 2016, these accounted for only four percent of the total energy production.

1 Source: www.oxfordenergy.org

Technological excellence for complex sources

Hydraulic fracturing is the key technology for producing natural gas from complex reservoirs. Unconventional reservoirs are characterized by very tight rocks. This makes a simple extraction of the embedded natural gas or oil impossible. Expensive hydraulic fracturing technology has to be used to recover oil and gas from the complex shale rock in the Vaca Muerta formation.

Water under high pressure is pumped into the formation and creates millimeter-thin flow paths. Proppants (for example, sand and ceramic) and additives are necessary to ensure that the artificially created flow paths remain open. This makes it possible for the gas and oil to flow to the well. Frequently, the so-called multi-frac method is deployed in which several fractures are placed one after another in the horizontal wellbore at specific distances apart.

Conventional versus unconventional reservoirs The difference

Property Ideal reservoir (conventional) Tight gas (conventional) Shale gas (unconventional)
Gas: In the pore space (reservoir rock) In the pore space (reservoir rock) In the source rock
Permeability: Good – very good Moderate Poor (like concrete)
Cap rock: Necessary Necessary NOT necessary
Production: Free flowing Uneconomic without hydraulic fracturing No production without hydraulic fracturing

Hydraulic fracturing process

 

Our expertise

Wintershall has decades of experience in efficient production from complex reservoirs.

Bound by tradition High environmental and safety standards are a matter of course

The exploration and production of unconventional reservoirs pose considerable technological challenges. Wintershall is ideally positioned to meet these challenges thanks to its decades of experience in efficient production from complex reservoirs and its unique technological expertise garnered from its tight gas production in Germany.

Wintershall is committed to complying with international conventions, local laws and regulations as well as its own high standards that it has set itself with regard to protecting people and the environment. The following principle applies to all its activities: health, safety and environmental issues shall always be given priority over economic success.

Wintershall has been working in Argentina for almost four decades and has established a strong bond with the country. For Wintershall, close ties and good cooperation between industry, policymakers and the public are important for recovering the available energy resources in a sustainable manner.

Wintershall is also engaged in social and cultural projects in the Argentine regions where it works, and supports numerous local projects in health, education and culture there. Wintershall therefore takes responsibility in very concrete ways as a reliable partner.

Handling water in a responsible manner

Handling natural resources in a responsible manner, as well as the careful use and protection of natural water resources, is a matter of course for Wintershall. It has also set itself the goal of keeping water consumption as low as possible and minimizing the impact on the environment. Hence, water management that saves resources and protects the environment is part of the company’s project planning from the very outset. As well as the company’s own high safety standards and regular inspections of facilities, an environmental impact assessment is carried out by external experts for each project. This forms the basis for the project authorization by the relevant authorities. 

Wintershall ensures, even during the pilot phase, that it saves or reuses as much water as possible thanks to innovative technologies or by recycling drilling fluid and circulation systems. This way the volume of water used can be reduced with each well. Then, at the end of any drilling campaign, the water is treated and disposed of properly. The consumption and the disposal of water are regulated and monitored according to the legal provisions and authorities of the province concerned.

When the projects enter the development phase, the implementation of a comprehensive water protection concept is planned so as to further optimize water management for the production plants. For example, in the production facilities in the Aguada Pichana und San Roque blocks, in which Wintershall holds a stake, it uses its own wells to extract deep formation water (no drinking water). After use, the water is treated in a processing plant and thereafter reinjected to the formation. The possibility to use these facilities for Bandurria Norte and Aguada Federal is currently being examined.

 

Argentina is an important region for us. The Argentinean shale formations in particular provide considerable potential. Wintershall has many years of experience on the ground and technological know-how to help shape the country’s energy future in a responsible manner

Thilo Wieland
Member of the Wintershall Board responsible for
South America, Russia and North Africa

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