January 2024

First oil

Argentina’s new president offers common sense approach
Kurt Abraham / World Oil

In an era when too many countries seem to be sliding toward more government control of everything, including energy policy, Argentina’s recently inaugurated president is a breath of fresh air. Indeed, President Javier Milei (Fig. 1) has shown quickly that he is not afraid to trumpet his message and philosophy of common sense government and free market capitalism. 

Fig. 1. Argentine President Javier Milei. Source: Official Government of Argentina photo.

Taking office on Dec. 10, 2023, after winning a runoff election for the presidency on Nov. 19, President Milei quickly issued 13 decrees and reduced the number of cabinet positions from 18 to 9 as part of his effort to reduce the size of government. In addition, Milei also talked about privatizing some of the country’s government-run corporations, including state oil company YPF.  

And on Jan. 17, 2024, Milei delivered a fiery speech at the World Economic Forum’s annual meeting in Davos, Switzerland. In that speech, he remarked, ““Today, I’m here to tell you that the Western world is in danger.” He then encouraged political and business leaders assembled at the WEF event to reject socialism and instead adopt “free enterprise capitalism” to improve the standard of living for people everywhere. No doubt, that was a shock to the system for many of the leaders assembled at Davos. No one would dare speak to this group quite the way that Milei did, save for maybe former U.S. President Donald Trump. 


Speaking of YPF, one of Milei’s first decisions was to appoint veteran oil executive Horacio Marin, with 35 years of experience, as the company’s new president and CEO. The appointment comes at a time when YPF has been performing better in its operations. YPF SA increased its oil production 7%, or 15,000 bpd, in the first nine months of 2023, compared with the same period in 2022. This improvement is due to greater upstream activity, with 225 wells drilled in this period, compared to 192 wells a year earlier, said the company.  

Last October, YPF achieved output of 250,000 bopd, the highest production figure in nearly eight years. On the downstream side, the firm's refining capacity reached a record high of 310,000 bpd in several months of 2023, with a 5% increase, or 13,000 bpd overall, for the first nine months of the year, as compared to the same period in 2022. 

This obviously prompts the following question: If YPF can perform this well under government control, how well might it function, if the company were privatized? 

John Kerry to switch roles. Last month, this editor profiled some of the buffoonery emanating from President Joe Biden’s climate envoy, John Kerry, during his participation in the COP 28 climate conference. One would have thought that we’d see a bit less of Kerry, early in the New Year, but not so. He has managed to stay in the headlines on a remarkably consistent basis. 

First, during the weekend of Jan. 13, word leaked out that Kerry will be switching roles later this winter. He will leave his climate envoy job to take a position as a climate champion in Biden’s re-election campaign. When that will take place is still uncertain. In the meantime, Kerry continues his jet-setting ways and made sure that he attended the World Economic Forum’s annual meeting in its usual place in Davos, Switzerland, Jan. 15. At Davos, on Jan. 16, Kerry confirmed that he will be switching roles.  

Reacting to Kerry’s intended job switch, several industry friends told this editor that they’re happy to see that his zealous environmentalism will no longer “be screwing up U.S. energy policy.” As one of them said directly, “if Kerry has to mess up something, let it be Biden’s re-election campaign.” 

Updated “polluters indexes” from U. Mass-Amherst. Sounding much like comrades-in-arms to John Kerry, two researchers at the University of Massachusetts-Amerst’s Political Economy Research Institute (PERI) have come out with their latest Greenhouse 100 Polluters Index, Toxic 100 Air Polluters Index and Toxic 100 Water Polluters Index. These indexes, they say, are supposed to reveal the top industrial polluters in the U.S.  

Sounding just a wee bit left-of-center, Michael Ash, co-director of PERI’s Corporate Toxics Information Project and professor of economics and public policy at UMass Amherst, said, “In making this information available, we are building on the historic achievements of the right-to-know movement. Our goal is to engender public participation in environmental decision-making, and to help residents translate the right to know into the right to clean air, clean water and a livable planet.” 

That’s all fine and dandy, but the fact of the matter is that all of PERI’s updated publications are based on U.S. Environmental Protection Agency (EPA) figures for 2021, the latest year for which data have been published. And we all know that the EPA loves to play with figures (especially if it makes oil and gas firms look bad), so how accurate are these data, and how seriously can we take them? 

The Greenhouse 100 Polluters Index ranks companies for direct release of greenhouse gases from industrial facilities. The index, based on EPA’s Greenhouse Gas Reporting Program, ranks companies by their domestic emissions responsible for global climate change. One has to wonder how that is determined. Predictably, Vistra Energy, Southern Company, Duke Energy, Berkshire Hathaway and American Electric Power are the top five (worst) firms on this list, due to most of them being fossil fuel-burning electric utilities. And it’s interesting that multi-billionaire Warren Buffett’s Berkshire Hathaway conglomerate is on the list—does he know that? Also, ExxonMobil ranks ninth on this list, based largely on releases from its oil refineries. 

The Toxic 100 Air Polluters Index is based on EPA’s estimate of total potential chronic human health risk from toxic chemical air pollutants. The top five firms of this group are LyondellBasell Industries, Kaiser Aluminum, BASF, Indorama Ventures and Salzgitter. Three of these companies are in the top five almost entirely because of chromium or ethylene oxide releases from a single facility, indicating large potential improvements from a focus on reducing pollution from those sites. 

Finally, the Toxic 100 Water Polluters Index ranks companies by comparative chronic human health hazard from water pollutants directly released or transferred to publicly owned treatment works from large facilities in the U.S. during 2021. The top five companies on this list include Dow Inc., LyondellBasell Industries, Celanese, Huntsman Corp., and Honeywell International. PERI’s release said that while Dow is linked to 16 facilities in the water pollution database, the vast majority of the company’s total water hazard, weighted by the toxicity of each chemical, is from 1,2,3-Trichloropropane at its facility in Freeport, Texas. 

Looking at this group of indexes, one can surmise that their real purpose is not so much to inform individual citizens, but rather to embarrass corporations, particularly those in the oil and gas industry. These indexes can be used to say, “See, look at how bad these fossil fuel companies are for the environment,” and then, in turn, be used to prop up the never-ending call for “renewable” energies, no matter how inefficient or full of hidden costs they may be. 

More of the same on the menu? As this January issue was preparing to go out to readers, we continued to work on our winter drilling forecast, which will appear in the February issue. As of this writing, we had not put together all of the numbers. However, we can offer some initial trends that we are seeing.  

In the U.S., there is a sense that 2024 will be more of the activity level experienced during fourth-quarter 2023. We don’t expect any major shift upward or downward in drilling activity. The question, as we worked on refining the numbers, is whether the total U.S. figure will be up slightly, down slightly or roughly even with 2023’s total. Perhaps the overarching reason for this static picture is that U.S. operators are waiting to see what happens in the presidential election next November. Accordingly, they are not taking many risks, not boosting activity beyond current levels. This seems to be true, regardless of company size, whether a major, large independent, mid-sized firm or small, mom-and-pop out fit. No one wants to go too far out on a limb, if the “wrong,” anti-E&P candidate wins in the fall. 

Meanwhile, the picture is brighter for international activity and for offshore projects globally. We see the Middle East leading the way again, with activity up in Africa and relatively healthy in the Far East/South Asia. There may be a mild increase in South America, as well. Offshore, the Middle East again is a leader in growth, along with Africa and the Far East/South Asia. These trends will become more clear, once we finish compiling the numbers. So, stay tuned for the full forecast in our February issue. 


Special focus: Hydraulic Fracturing. In one article of our lead theme this month, authors from Halliburton discuss how, in the evolving landscape of hydraulic fracturing, a transformative synergy of electrification, automation and real-time optimization has emerged. The commingling of these technologies is paving the way for unprecedented efficiency and performance gains, while also reducing costs and NPT. In the second feature of this section, an NOV author describes how a next-generation electric fracturing system improves efficiency and ESG performance. An innovative 5,000-hp frac platform combines intelligent electrical architecture and simplified drivetrains to increase power density and flexibility, streamline rig-up logistics and minimize carbon emissions. 

Managed pressure drilling: Driving MPD adoption with performance-enhancing technologies. 

In one of this month’s primary sub-themes, a Weatherford author details how a new performance solution for MPD applications was launched to address a substantial portion of the market between existing entry-level and premier tier offerings. The author describes the differences in these solutions and presents a case study highlighting performance improvements. 

G&G technology: Quantum computing and subsurface prediction. Several authors from Geophysical Insights and one consultant discuss how quantum computing has vast potential to reshape subsurface evaluations, providing capabilities and advanced geoscience analyses that are orders of magnitude faster and superior to any computer system that exists today. Taking advantage of quantum mechanical effects, quantum computing can process millions of calculations concurrently. It is this phenomenon that provides encouragement that quantum computers will take geologic subsurface interpretation beyond anything we can imagine today..  

About the Authors
Kurt Abraham
World Oil
Kurt Abraham kurt.abraham@worldoil.com
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