Argentina Offshore Auction Attracts Interest From Oil Producers



Reuters

HOUSTON, May 9 (Reuters) - International oil firms including Norway's Statoil, U.S. Anadarko Petroleum, China's CNOOC and Malaysia's Petronas have shown interest in Argentina's auction this year of offshore blocks for exploration and production, the country's energy minister said on Wednesday.

Argentina faces growing regional competition as countries with large oil reserves including Brazil and Mexico are offering a record number of areas while starting a new wave of energy reforms to attract foreign investment.

"It's an unexplored area... We are expecting (to have) some companies already working in Argentina and new companies as well," minister Juan Jose Aranguren said on the sidelines of an energy conference in Houston.

Argentina, which is still defining the areas to be included in its auction, expected to receive bids in late November and is giving incentives for oil companies currently exploring at its large Vaca Muerta shale play to move from pilot to full development phase.

The country last year started creating a new framework for firms to move their projects to the production stage, which has already begun boosting the output of unconventional gas. The framework includes lower labor costs, reduced taxes on imported drilling equipment and a fixed purchase price for the gas produced.

In recent months, six projects have been granted access to the incentives for starting the production stage, and the government expects 13 more concessions to adopt the country's incentive program in the coming months, Aranguren said.

A $500 million railway project to move raw material and equipment for projects in Vaca Muerta, infrastructure needed by 2021, is expected to be tendered by the end of May.

As the country's unconventional gas production increases, Argentina is also in talks with its neighbors Chile and Bolivia to solve its seasonal gas deficit by increasing winter imports from Bolivia while selling its surplus to Chile in the summer.

"This is quite a constraint. I'm prepared to pay more (to Bolivia) during the summer if we can adjust the volumes," Aranguren said.

Argentina under President Mauricio Macri has been pushing to reverse the nation's oil and gas production decline while re-regulating the retail fuel market. But as global oil prices continue rising, the increase has been difficult for many refiners in the country.

The minister said he will call crude producers to participate in a program recently agreed with three refining companies to defer fuel price increases planned for May and June to the second half the year.

"I think they could try to make sale terms easier for refining companies," Aranguren said.

(Reporting by Marianna Parraga Editing by Chizu Nomiyama and Cynthia Osterman)



WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.