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He said that Neuquen Province, which is home around the size of Belgium and contains around
to most of the Vaca Muerta formation, would 308 trillion cubic feet (8.722 trillion cubic
be able to double its oil yields and keep gas pro- metres) of shale gas and 16bn barrels of shale
duction rising until 2030 if it spent $12bn on oil, according to the US Energy Information
infrastructure projects and another $7bn on well Administration (EIA). Its full potential has yet
drilling and completion. to be realised, but production levels have been
For his part, Omar Gutierrez, the governor climbing this year on 2021 levels. ™
of Neuquen, said the province did not have an
adequate supply of drilling rigs. There are cur-
rently 34 units operating at Vaca Muerta fields,
and another 19 are needed, he declared. He also
said that Neuquen was working to push oil pro-
duction levels back up to their previous peak of
308,000 barrels per day (bpd) and hoped to see
gas output hit 140mn cubic metres per day by
2030.
Alexandre Ramos, vice president of shale
research at the Norwegian energy consultancy
Rystad Energy, also pointed to shortages of
fracking equipment. “Frac fleet availability is a
massive bottleneck,” he was quoted as saying at
the conference by Reuters. “We are seeing his-
torically high gas production in Neuquen, so
upcoming expansions are critical to allow Vaca
Muerta to satisfy demand.”
Vaca Muerta is one of the largest unconven-
tional hydrocarbon basins in the world. It is Fracking operation at Fortin de Piedra field in Vaca Muerta (Image: Tecpetrol)

GLOBAL
OPEC+ makes 2mn bpd cut, angering the US

THE OPEC+ group of oil producers made the output. The White House published a statement
decision to cut combined output by 2mn barrels by National Security Advisor Jake Sullivan and
per day (bpd) when they met in person this week National Economic Council Director Brian
for the first time since the coronavirus (COVID- Deese that said Biden had been “disappointed
19) pandemic began. It comes despite fears by the short-sighted decision by OPEC+ to cut
about the global economy and follows a lengthy production quotas while the global economy is
period during which Middle Eastern oil pro- dealing with the continued negative impact of
ducers in particular have been urged to increase Putin’s invasion of Ukraine.” But the true source
yields as they near theoretical output highs. of this disappointment may be upward pressure
The reduction was the group’s second in as on fuel prices just over a month before Biden
many months, with September’s decision wiping faces a challenging midterm election.
out the 100,000 bpd added to output in August. Despite widespread pressure, though, the
Over the previous 18 months OPEC+ had group’s top producers – Saudi Arabia and Rus-
been working to return around 10mn bpd of sia – have stuck by each other, appearing to have
supplies taken off the market to stem the mas- learnt from the folly of their short-lived price
sive losses experienced by oil exporting nations war that coincided with the start of the pan-
when crude prices plummeted in the second demic, and members said that the reductions
quarter of 2020. The slow build-back ensured were required “in light of the uncertainty that
that prices rose steadily, but renewed volatility surrounds the global economic and oil market
amid conflict and concerns about demand has outlooks.”
necessitated action in the opposite direction Russia was reportedly keen to cut output
as many market commentators opine that the by 1mn bpd, while Saudi Arabia had been
group now views $90 per barrel as a non-nego- rumoured to be considering an additional uni-
tiable price floor, though the Saudi government lateral cut of about 500,000 bpd. The two coun-
has denied any desire to control prices. tries account for more half of the OPEC+ group’s
The cut drew immediate criticism from 43.86mn bpd production quota for October at
major consuming nations, led by the US, whose 11mn bpd each, but while Saudi Arabia has been
President Joe Biden lobbied hard earlier in the able to produce around this level of late, Russian
year to encourage OPEC+ members to raise output has fallen as sanctions bite. ™

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