Page 16 - LatAmOil Week 24

LatAmOil BRAZIL LatAmOil

State-controlled Petrobras made a declaration The virus is not the only factor affecting
of force majeure in early June, asking to bring Bolivian exports. Brazilian buyers have in recent
minimum delivery volumes down to 10 mcm months been making more extensive use of
per day, it explained. imported LNG, which is cheaper than Bolivian
Petrobras has been importing Bolivian gas piped gas, according to Argus Media.
since 1999, under a long-term supply agree- At the same time, though, YPFB has seen
ment. When that deal expired at the end of 2019, gas exports to another destination rise lately.
the parties opted to extend it for another 90 days The company sent 15.7 mcm per day of gas to
under the same terms, which set the lower limit Argentina in May, compared with just 10.5 mcm
for gas deliveries at 24 mcm per day and the per day in April, as winter weather took hold in
upper limit at 30 mcm per day. Then in early the southern hemisphere. It expects shipments
March they agreed to another extension that to rise again in June, reaching 18 mcm per day.
provided for delivery volumes to remain in the Delivery volumes are still down year on year,
range of 14-20 mcm per day. though. Argentina imported around 20 mcm
At that time, YPFB said it hoped eventually per day of gas from Bolivia in 2019. ™
to see the volume of Bolivian gas flowing to Bra-
zil increase. Specifically, it said it wanted to see
shipments rise to 24-30 mcm per day over time.
Rather than rising, though, shipments have
remained stubbornly below the minimum of 14
mcm per day set in March. According to YPFB,
Petrobras imported 13.9 mcm per day in March,
10.7 mcm per day in April and 11.6 mcm per
day in May. The Brazilian company then made
a declaration of force majeure in early June in
a bid to bring the lower limit for gas deliveries
down further.
YPFB noted that Petrobras had taken this
step because of the decline in energy demand
that has followed the coronavirus (COVID-19)
pandemic, saying: “In light of the extraordinary
situation we face, we approved the force majeure
requested by Petrobras because of COVID-19.” Brazil imports Bolivian gas by overland pipeline (Image: ECEN.com)

ARGENTINA
Shell suspends work at Vaca Muerta block

ROYAL Dutch Shell briefly suspended oper- sustainable return to work were guaranteed,” it
ations at Bajada de Añelo, a block within explained.
Argentina’s Vaca Muerta shale formation, after The shutdown did not affect any of the other
registering seismic activity in the region last Vaca Muerta blocks that Shell is developing.
week. The shutdown came to an end after just Vaca Muerta, one of the largest shale forma-
two days. tions in the world, is around the size of Belgium.
The Anglo-Dutch major reported on June 7 It contains around 308 trillion cubic feet (8.722
that it had put work at the block on hold as a pre- trillion cubic metres) of shale gas, according
ventative measure in response to seismic activity to the US Energy Information Administration
in the western part of Neuquén Province, near (EIA). It has attracted investment from a num-
the Andes bordering on Chile. The company ber of foreign majors, including Total (France),
is developing Bajada de Añelo with its partner, ExxonMobil (US), Chevron (US) and a subsidi-
Argentina’s state-owned oil and gas firm YPF. ary of BP (UK), as well as Shell.
Initially Shell declined to say exactly when Nevertheless, Vaca Muerta fields have seen
it would restart operations. “We are evaluating output decline over the last two months. YPF
the information available and the evolution of began cutting production at its key oil play in the
the situation... We will resume activities when formation in April because demand fell during
we consider that conditions are appropriate,” the the lockdown imposed to try to curb the spread
company said in a statement. of coronavirus (COVID-19). It closed down half
Then on June 9, it issued a separate statement of its producing wells at the Loma Campana
saying that it had gone back to work at Bajada block, according to local newspaper Rio Negro.
de Añelo. “Shell Argentina resumed its activities YPF is working with Chevron at Loma Cam-
on Pad 22 of the Bajada de Añelo block, after pana, which has been producing more than
determining that the conditions for a safe and 40,000 barrels per day (bpd) of oil. ™

P16 www. NEWSBASE .com Week 24 18•June•2020