Page 16 - LatAmOil Week 29 2020

LatAmOil BRAZIL LatAmOil

On July 17, ANP and the country’s aviation planning to sell $20-30bn worth of assets,
agency ANAC said they would create a working including eight of its domestic oil refineries,
group to take a deeper look at complaints about between 2020 and 2024.
the quality of avgas available for purchase on the In March, it kicked off the sale process for its
Brazilian market. They did not say when they 51% stake in its natural gas unit Gaspetro and for
expected to begin this investigation. its stakes in the Merluza and Lagosta oilfields,
It is not clear whether the matter will affect both located in shallow waters of the Santos
Petrobras’ plans to sell its stake in BR Dis- Basin, the largest offshore sedimentary basin in
tribuidora as part of a major divestment cam- Brazil.
paign. Andrea Almeida, the CFO of the national Petrobras, traditionally one of the largest
oil company (NOC), said earlier this month oil companies in the world, has been trying to
that Petrobras wanted the sale to go forward pay down debt and recover from the Lava Jato
but might not be able to do so this year, owing (Clean Hands) corruption scandal, through a
to changes in market conditions caused by the strategy based on divesting non-core assets to
coronavirus (COVID-19) pandemic. focus on development of upstream assets in the
Last December, Petrobras said it was deepwater pre-salt area. ™

ARGENTINA
Argentina’s oil output plunges

to lowest level in 20 years

ARGENTINA has reported that crude oil pro-
duction plunged to its lowest level in 20 years
in May.
According to newly released government
data, oil output dropped by 12.2% year on year
in May to the equivalent of 72mn cubic metres
per day. Buenos Aires has not provided a full
breakdown of its figures, but it has reported that
conventional oilfields saw yields fall by 16.2% in
the same month, while unconventional oilfields
increased production by 5.9%.
Government data also show that natural gas
production slipped by 9.2% y/y in May to reach
124 mcm per day, with unconventional output
falling by 7.2% and conventional production by
10.6%.
Argentina’s oil and gas sector has been
struggling since the emergence of the corona-
virus (COVID-19) pandemic. The outbreak has Production has fallen significantly in the Vaca Muerta formation (Photo: Equinor)
led the government to impose restrictions on
movement and work and has also caused energy have relaxed the rules recently, and the city of
demand to slide. Meanwhile, low oil prices have Buenos Aires announced on July 17 that it
also put pressure on the industry. intended to loosen restrictions in stages.
The national oil company (NOC) YPF has Nevertheless, conditions have not returned
definitely been affected by these developments. to normal in the oil and gas sector. Government
It has cut production at its oil and gas fields in officials have warned that the country may fall
the Vaca Muerta shale formation in response to short of meeting domestic demand by as much
the drop-off in demand. In March, YPF said it as 30 mcm per day during the winter of 2021 if
would gradually suspend activities that were not production remains at current levels.
critical to its business. Then in April, it closed Analysts have cautioned, though, that pro-
down half of its producing wells at Loma Cam- ducers have little incentive to bring output up
pana, its flagship field at Vaca Muerta. more than necessary to meet demand, since
Meanwhile, a number of private firms have they sell most of the oil and gas on the domestic
also shaved production since March 20, when market. As a result, they may continue to oper-
Argentina’s government introduced a nation- ate below pre-pandemic levels until quarantine
wide lockdown. Several regions of the country measures are fully lifted. ™

P16 www. NEWSBASE .com Week 29 23•July•2020