Page 13 - LatAmOil Week 15 2020

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 The Norwegian company will take 50% of this deepwater asset, the statement said, without revealing the financial terms of the deal.
YPF launched a four-year exploration pro- gramme at CAN-100 in May of last year, shortly after acquiring rights to areas adjacent to the original block. Just a few months later, it con- cluded a preliminary agreement with Equinor ontheproject.
The formation of the joint venture for CAN- 100 will allow the Norwegian company to expand its operations in Argentina’s offshore zone. Equinor paired up with YPF during the South American country’s last offshore bidding round to sign contracts for work at the CAN 102 and CAN 114 blocks, which also lie within the North Argentinian Basin.
To date, the parties have not revealed many details of their plans for CAN-100. YPF has said, though, that another investor might join the project.
Daniel Gonzalez, the NOC’s chief executive, explained the matter last month during a con- ference call on YPF’s fourth-quarter earnings. “Another transaction that I would like to high- light at this time is in the deep offshore off the coast of Argentina,” he said. “We obtained three blocks in the bidding round in April [2019] that were added to the CAN-100 block, where we
already had rights. In all cases, with best-in-class operating partners like Equinor and Total, and furthermore in [the] CAN-100 block, in addi- tion to the farm-out already announced with Equinor, we are currently in advanced negoti- ations with a third partner that should be enter- ing the block very soon. With this transaction, this block is an opportunity that we can initially pursuewithverylimitedfinancialexposure.”
Gonzalez did not identify the other potential partner. ™
CAN-100 lies in the deepwater North Argentinian Basin (Image: Equinor)
Lower fuel demand leads YPF to slash Vaca Muerta output
ARGENTINA’S state-run energy firm YPF has reportedly cut oil production at fields in the Vaca Muerta shale formation, on the grounds that energy demand has fallen since the govern- ment imposed a lockdown to curb the spread of coronavirus.
To this end, the national oil company (NOC) closed down half of its producing wells at Loma Campana, its flagship field at Vaca Muerta, local newspaper Rio Negro said.
YPF is working with the US super-major Chevron to develop Loma Campana, which had been yielding more than 40,000 barrels per day (bpd) of oil.
YPF is not the only operator to take this step. Mexico City-based Vista Oil & Gas has also reduced production at its Vaca Muerta fields, which cover an area of 137,000 acres (554 square km), according to Rio Negro.
Vaca Muerta is around the size of Belgium and contains around 308tn cubic feet (8.722tn cubic metres) of shale gas, according to the US Energy Information Administration (EIA). Chevron, Royal Dutch Shell (UK/Nether- lands), Total (France), ExxonMobil (US) and a
subsidiary of BP are among the companies with a stake in Vaca Muerta, which is one of the larg- est shale formations in the world.
According to YPF’s executive president, Daniel Gonzalez, Argentina saw demand for gasoline drop by no less than 70% within five days of the start of the mandatory lockdown. Rio Negro, citing an internal YPF video, quoted him as saying that diesel demand had gone down by nearly 50%, while jet fuel demand had plummeted by 90% in the same period.
Argentina has been under mandatory lockdown since March 20. Late last month, YPF warned that the public health regime had reduced fuel demand to the point where the company was likely to face challenging times. “This will leave us with the need to export crude oil at low prices, with which our income will clearly be negatively affected,” Gonzalez said in the video.
Last month, YPF said it would gradually suspend activities that were not critical to its business, in line with the emergency measures taken to slow the global coronavirus (COVID- 19) pandemic.™
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