Exploration: Shale oil in Argentina

One could take the view that the best cash flow from Shale Gas has in fact come to oil field service companies that supply Fracturing/Stimulation, Horizontal Drilling or 3D/4D Seismic and to the US 'resource play' companies that have sold or farmed-down their Shale Gas.

It is not surprising therefore that, having learned how to apply the key technologies, these US 'resource play' companies are switching their attention to Shale Oil, in most cases in basins which have a long history of conventional oil exploration and are now in decline. The economics of Shale Oil are generally better than those for Shale Gas because of the linkage to global oil prices.

Now the Spanish international oil company Repsol has made its biggest ever oil discovery after drilling 15 wells in the Neuquén province of western Argentina. A longer version of this article, by Jane Whaley, may be found in Geoexpro.



The discovery was made by the Argentinian branch of the company, YPF, and is reported to total 927 MMboe (recoverable) of predominantly non-conventional shale oil, potentially making Argentina one of the world's leading producers of this commodity.

Recoverable resources of 741 MMb of 40 - 45° API shale oil are thought to be reservoired in 428 km2 of the Vaca Muerta Formation.

YPF have already drilled 15 wells in the area, known as Loma La Lata Norte, and have reported that the wells have been flowing high quality shale oil at an initial rate of 5,000 boepd.

The Vaca Muerta Formation is one of the world's largest non-conventional reservoirs. It is a Late Jurassic to Early Cretaceous transgressive marine sequence of alternating black shales and limestones, the former being one of the principal source rocks for the Neuquén Basin. It extends to over 30,000 km² and in places is up to 425m thick.

Exploration is also in progress at another discovery in a 502 km2 area of the same formation, where the well is flowing 400 boepd of 35° API shale oil. There is potential for even larger reserve estimates, as Repsol YPF has rights to 12,000 km2 in the Vaca Muerta Basin, which, according to Wood Mackenzie, means that it is the world's second largest company in terms of non-conventional acreage.

This discovery doubles its proven reserves in Argentina and increases by a third the amount of recoverable oil claimed worldwide by the company.