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Unconventional oil and gas production in Argentina

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

However, the country has only just begun to develop its unconventional resources. Until now, only about 700 wells have been drilled in Argentinas 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 local knowledge to recover hydrocarbons from the attractive 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 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 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 there. The company is now leveraging this knowledge and is focusing on the attractive 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 projects are currently being conducted in all the blocks.

Find out more about the projects in Wintershall's 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 attractiveness, the energy-rich country was 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 from unconventional reservoirs, which are characterized by very tight rocks. This makes a simple extraction of the embedded natural gas or oil impossible. Hydraulic fracturing technology has therefore to be used to recover oil and gas from the shale rock of 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 towards the well. The so-called multi-frac method is deployed in which several fractures are placed one after another in the horizontal wellbores 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 always commited 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 environment 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 there numerous local health, education and cultural projects. Wintershall therefore takes responsibility as a reliable partner.

Handling water in a responsible manner

Handling natural resources in a responsible manner, for instance the careful use and protection of water, is a matter of course for Wintershall. The company has set itself the goal of keeping water consumption as low as possible and also to minimize the impact on the environment. Hence, water management that saves resources and the protection of the environment are part of the company’s project planning from the very outset. An environmental impact assessment is carried out by external parties for each project. This assessment also forms the basis for the project authorization by the relevant authorities.

Wintershall aims, even during the pilot phase, to save or reuse as much water as possible, thanks to innovative technologies or by recycling drilling fluids. This way the volume of water used can be reduced with each well. Then, at the end of the drilling campaign, the water is treated and disposed of properly. The consumption and disposal of the water is regulated and monitored by provincial authorities.

When the projects enter the development phase the implementation of a comprehensive water management concept is planned. For example, in the production facilities in Aguada Pichana and San Roque, in which Wintershall holds stake, there are dedicated wells to extract deep formation water (no fresh water). Production water is treated in a processing plant and thereafter reinjected to the formation.

Wintershall is currently discussing with neighboring license holders to develop a common water management strategy.

 

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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