South America: Argentina

SOUTH AMERICA

Stuart Wilkinson, Contributing Editor

Argentina

New President Fernando De la Rua has tried to move rapidly to revive the country’s economy, which suffered a year-long recession and 14% unemployment. He succeeded in reforming the labor laws so that companies could determine their pay scales, thereby aiding the climate for foreign investors. The IMF recently approved an important $7.4-billion standby loan.

Exploration. In late 1999, Repsol-YPF (50%) and operator Sipetrol Argentina (50%) discovered a field on offshore Block CAM-2/A South near the Magellan Strait. Well CAM XE1 reached a 5,660-ft TD, and tested 15 MMcfgd and 151 bcpd from the Springhill formation. A second well, CAM XE1A, tested 2,000 bopd and 620 Mcfgd. Apco Argentina put well Borde Mocho 2 into production, close to the 1996 BM 1 oil discovery.

British Gas, which has 100% interests in the Los Tordillos Oeste exploration block in the Cuyo basin and the Barranca Yankowsky Block, plans two wells for 2001. Early this year, Chevron discovered a new oil field in the RÌo Negro North Block: The El Solitario Sur X1 tested 220 bpd of 18°API crude from 8,638 to 8,695 ft. Chevron produces 78,000 bopd in Argentina, 9.75% of the country’s total oil output. Chevron’s Petrolera Argentina San Jorge subsidiary made an oil find with its El India Oeste well in Moy Aike Block, Santa Cruz province, and with the El Látigo Este well in Rio Negro Norte Block, Rio Negro province. Chevron bought San Jorge in September.

Development/drilling. BP Amoco’s Pan American Energy said, this summer, that the firm will spend almost $500 million on Argentine projects in 2000 ($225 million) and 2001 ($265 million). About $180 million will go toward drilling 200 exploration and development wells in the Cerro Dragon concession of southern Argentina. San Jorge, operator, and partner Fletcher Challenge Energy continued testing three fields drilled in Block CNQ-16/A in the Neuquen basin: Estancia El Colorado X1, El Aguara X1 and Bases X1. A total of 443 oil wells were drilled in 1999 compared to 776 in 1998. Seventy-one natural gas wells were drilled in 1999, versus 53 in the previous year.

Argentina’s natural gas output rose 9.6% last year, to 4.1 Bcfd, while oil production slipped 4.3%, to 866,030 bpd. (Photo courtesy of Santa Fe Snyder Corp.)

Production. Gas companies looked for federal support in a Supreme Court case. They sought relief from provincial government claims to a sales tax – roughly 1% on all distribution contracts. Río Negro, Neuquen and other gas-producing provinces levied the tax on gas companies formed after the 1992 privatization of Gas del Estado. The country’s crude production averaged 801,376 bopd in 1999, down 5.4% from 1998’s level. Condensate output rose 9.7% to 64,654 bpd. Gas production improved 9.6% to 4.1 Bcfd.