Total has approved the development of the first phase of the Aguada Pichana Este license in the Vaca Muerta shale play in Argentina, following the announcement by the Argentine Ministry of Energy and Mines of the “Program for Stimulation of Unconventional Gas Developments” which guarantees gas prices until 2021. In addition, the group will raise its interest in the license, from 27.27% to 41%.
Total is the operator of the license, with a 27.27% interest, in partnership with YPF (27.27%), Wintershall (27.27%) and Panamerican Energy (18.18%). Partners have just entered into a Memorandum of Understanding (MoU) that includes an increase of Total’s participation to 41% in the Aguada Pichana Este project being developed. Gas production from the project will be treated at the existing Aguada Pichana gas plant which will thus reach its full capacity of 16 mcm/d (5.8 bcm/year or 100,000 boe/d).
Total has been active in Argentina for nearly 40 years and operates around 30% of the domestic gas production, with 78,000 boe/d in 2016. The group operates the onshore Ara and Cañadon Alfa fields and the offshore Hidra, Carina and Aries fields in Tierra del Fuego and holds equity interests in ten blocks in the onshore Neuquén basin.
Overall, Argentina expects investments in Vaca Muerta to reach US$6-8bn in 2017 (investments that have been confirmed in 2017), US$12-15bn in 2018 and US$20bn/year from 2019 onwards.