Page 16 - LatAmOil Week 47 2020

LatAmOil ARGENTINA LatAmOil

Argentina’s national oil company (NOC) YPF, may help save Argentina around $5bn by boost-
which suspended nearly all drilling activity in ing domestic production and reducing the need
the spring following the introduction of strict to import gas to cover seasonal demand. The
public health measures, has spoken positively new policies have also won praise from Pan
about the new forex policy. Santiago Tanoira, American Energy (PAE), which is 50% owned
the state-owned firm’s vice-president of gas and by BP. As Rodolfo Freyre, PAE’s vice-president
energy, praised the new incentives, saying: “We of gas, electricity and commercial development,
are returning to drill for gas.” said earlier this month: “Thank goodness the gas
plan is being implemented, because if you don’t
Tenders and other measures stop this level of decline [in gas production], it
The relaxation of forex controls is just one aspect will continue to decline.”
of the gas stimulus plan that Argentina’s Pres- Argentina’s oil and gas sector has slowed
ident Alberto Fernández unveiled last month. down considerably this year, as a result of the
Buenos Aires has also instructed YPF to invest strict public health measures introduced by
$1.8bn in gas production over the next three the government to confront the coronavirus
years. Additionally, it has offered to accelerate (COVID-19) pandemic. There were virtually
the process of granting gas export permits to no rigs running in April, but upstream activity
participants in the programme. has been slowly picking up since then. Even so,
Moreover, it has unveiled a four-year tender the country’s gas production averaged 126.1mn
scheme under which producers will be able to cubic metres per day in the first nine months
offer gas to the market at a price of up to $3.70 of this year, 7.3% below the figure of about 136
per mmBtu. The tenders will cover 70mn cubic mcm per day posted in the same period of 2019.
metres per day, equivalent to just over half of the The new Gas Plan is designed to supplement
South American country’s current output. previous efforts to aid the industry. In June, for
The government has already opened the example, Argentina’s government agreed to
first bidding contest and will accept bids until resume payments worth $250mn for a subsidy
December 2, Argus Media said last week. It will programme meant to support production at a
then announce the winners on December 15. number of gas blocks in the Vaca Muerta shale
Government officials believe these measures formation. ™

PERU
Peru names new energy minister

PERU’S new government has named Jaime production targets. Crude output hit 63,738 bar-
Galvez as Energy and Mining Minister, thereby rels per day (bpd) in November 2019, according
completing the Cabinet of interim President to statistics from the Peruvian Oil and Gas Asso-
Francisco Sagasti. ciation (SPH). This was the highest monthly fig-
Galvez, who previously served as the dep- ure recorded in five years and was 31% higher
uty head of the Energy and Mining Ministry, than in the same month of 2018. The increase
is assuming his duties at a time of significant stemmed from a rise in production at the Loreto
political upheaval in Peru. Sagasti’s predecessor, block and in the Tumbes offshore basin.
Martin Vizcarra, was ousted after a controversial Prior to the pandemic, Peru’s government
impeachment in early November, and was then had said it hoped to see oil production hit
succeeded by congressional speaker Manuel 100,000 bpd this year.
Merino. However, the latter was then forced to The sector has also been hit this year by social
step down after just five days in office. protests – including demonstrations at Block 95,
The new minister will also face the challeng- the only block operating in the country’s north-
ing task of improving conditions in a sector of ern jungle region. The block, which is operated
the economy that has been battered by the coro- by the Canadian independent PetroTal, was
navirus (COVID-19) pandemic and by social forced to halt operations several times but is now
protests. A number of Peru’s oil and gas fields back online. It yielded 9,200 bpd of crude last
were shut down in the spring following the month, equivalent to more than 24% of national
introduction of public health measures designed output of 37,800 bpd, according to the national
to rein in the pandemic. Many have remained regulator PeruPetro. In October 2018, by con-
closed since then – including Blocks 8, 67, 192, trast, the country extracted 56,000 bpd of oil.
95, Z-1 and Z-2, all of which yielded no oil or gas Although Peru has significant proven oil and
at all in the month of June. gas reserves, it imports about $5bn worth of
The decline in domestic hydrocarbon petroleum products each year. Domestic crude
production represents a major blow for the production levels have been declining since the
Latin American country, which in the months 1990s and currently amount to only around one
preceding the outbreak had been achieving its quarter of what they were in the 1980s. ™

P16 www. NEWSBASE .com Week 47 26•November•2020