In this list
Natural Gas | Oil

Argentina's Vaca Muerta fracking activity rises to record high in March

Crude Oil | Natural Gas | Natural Gas (North America) | Upstream

Platts Upstream Indicator

Electric Power | Energy Transition | Renewables | Energy

Bridging the gap between conventional energy resources and newer technologies

Oil | Energy Transition | Energy

APPEC 2024

Coal | LNG | Natural Gas | Upstream | Energy Transition | Thermal Coal | Renewables

US power sector gas demand to peak in 2024 on renewables buildout: Commodity Insights

Energy | Oil | Crude Oil

Fujairah Oil Industry Zone | S&P Global Commodity Insights

Metals | Chemicals | Crude Oil | Upstream | Shipping | Agriculture | Polymers | Ferrous | Non-Ferrous | Fertilizers

Commodity Tracker: 6 charts to watch this week

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

Argentina's Vaca Muerta fracking activity rises to record high in March


Activity rose 7% on month

YPF was the most active fracker

Drivers include higher oil prices, export opportunities

  • Author
  • Charles Newbery
  • Editor
  • Debiprasad Nayak
  • Commodity
  • Natural Gas Oil

Fracking activity in Vaca Muerta, the biggest shale play in Argentina, rose 7% to 733 frac stages in March from the previous month, reaching the highest level on record as a rise in oil and natural gas prices and a recovery in demand improves the prospects for sales, a data report showed April 5.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

The number of frac stages was up from 685 in February and was more than the previous record of 712 in March 2019, the Argentine unit of Houston-based services company NCS Multistage said in a data report.

Of the activity last month, Argentina's state-backed YPF was the most active with 230 stages, trailed by Argentina's Tecpetrol with 150 and Shell with 124. BP-backed Pan American Energy accounted for 92 of the stages, while Argentina's Pluspetrol did for another 68, Chevron for 39, ExxonMobil for 26 and Vista Oil & Gas for four, according to the report.

Luciano Fucello, who runs NCS' business in Argentina, told S&P Global Platts that three things led the increase last month.

The first was that oil companies completed wells that they was drilled but not completed when oil prices plunged last year during lockdowns for the COVID-19 pandemic. The March to November lockdown in Argentina, where most of the Vaca Muerta oil is sold, cut demand to as low as 200,000 b/d from an average of 450,000-500,000 b/d before the health crisis. The recovery has been slow, with refiners only returning to nearly a pre-pandemic utilization rate of 77.5% this past January, according to data from Indec, the state statistics agency.

The second driver was higher oil prices. Brent, the international crude reference price followed in Argentina, has recovered to $65/b from less than $35/b in April 2019, making the business more attractive for selling supplies both locally and abroad. Fucello said that companies like Shell and Vista have been exporting more shale oil to take advantage of the high prices before a recovery in domestic demand means they will have to sell more in the local market once it happens, but there is a risk of price caps for political reasons.

The third driver was gas pricing incentives. The government launched a 2020-24 program to rebuild gas production after it tumbled below the 140 million cu m/d average demand last year, bringing prices above breakevens at between $3.50/MMBtu and $4.70/MMBtu from less than $2.50/MMBtu in 2020.

The program has reactivated "several sleeping projects," including Tecpetrol's Fortin de Piedra and Pluspetrol's La Calera, Fucello said.

The rise in frac stages is translating to higher oil production in Neuquen, home to most of the fracking activity in Vaca Muerta. Crude production in Neuquen, the biggest source of oil in Argentina, rose 6.9% to 178,349 b/d in February from 166,822 b/d in February 2020, taking the increase in the first two months of 2021 to 5.2% from the year-earlier period, according to the Energy Ministry of the southwestern province. Of the output, 78% came from Vaca Muerta.