TotalEnergies plans to widen oil and gas exploration in Argentina: country chair

TotalEnergies plans to expand exploration in Argentina, including the offshore Malvinas basin, onshore conventional and Vaca Muerta oil, and dry shale gas, as part of a strategy to diversify its portfolio, the company's Country Chair, Sergio Mengoni, said late Oct. 20.

"Diversification is very important for our portfolio and I think it's important for the country as well," by providing more sources of energy to meet domestic and export demand, Mengoni said at the Argentina Oil and Gas Patagonia Expo in Neuquén.

This strategy includes a $1.5 billion project, dubbed Alberdi, to drill three to five new wells that will connect to existing offshore platforms in the southernmost province of Tierra del Fuego, where TotalEnergies is a leading gas producer.

"This is going to produce a lot of conventional gas for the country," Mengoni said.

He said this is "a good complement" to Vaca Muerta, a huge shale play in northern Patagonia that is driving Argentina's oil and gas production growth.

As part of this diversification, TotalEnergies also plans to drill three to five onshore wells in Tierra del Fuego for both oil and gas, Mengoni added.

"It is very promising," Mengoni said of its potential.

Mengoni said there are more prospects in conventional resources around the country that merit exploration.

One of these is an offshore block in the Malvinas basin near its large gas developments in Tierra del Fuego, where it is working with Norway's Equinor and Argentina's state-backed YPF.

"We are very excited about this block," Mengoni said, adding that a decision will be made soon about whether to continue exploration or not.

Vaca Muerta dry gas potential

These conventional projects will expand on its Vaca Muerta investments in northern Patagonia.

The company has said it plans to invest between $4 billion and $5 billion to boost gas production in Vaca Muerta, targeting 16 million cubic meters/day of output, mainly from the Aguada Pichana Este dry gas block. It also plans to invest $5 billion to boost oil production in its San Roque block to 60,000 b/d.

Mengoni said there is potential for growth in the dry gas window of Vaca Muerta, even though most of the new projects are focused on the oil and wet gas windows.

"The country's gas demand is going to increase by a lot," he said, pointing out that gas now provides half of the national energy demand. "This means that dry gas is always going to be needed to complement the energy mix."

Argentina consumes 140 million cu m/d of gas on average, exporting some 10 million cu m/d to neighboring countries. There are projects to increase exports, including under-construction and proposed LNG export facilities with up to 24 million metric tons/year of capacity, or 90 million cu m/d.

Dry gas is considered a better backup for meeting demand than the associated gas produced with oil, which is targeted for supplying the LNG export facilities. Vaca Muerta is largely a dry gas play, with 258 trillion cubic feet of its total 300 Tcf in gas resources in the gas window, according to the Argentina Oil and Gas Institute, an industry group.

Regional gas exports

There is also potential for increasing gas shipments to the region, Mengoni said. "The regional market is a very important pillar for continuing with this diversification and it allows us to reach markets that need gas."

He said the pockets for new growth are Brazil and northern Chile, as well as northern Argentina, which is undersupplied. "It is going to grow," Mengoni said of the regional exports.

—Charles Newbery, newsdesk@spglobal.com