Argentina increases production of oil and natural gas as efforts to reduce LNG imports continue

Argentina continues to increase its production of oil and gas amid high prices and government pressure to increase production.

November oil production rose 15% per year to 557,000 bpd, the highest monthly figure in nine years, Energy Secretary Darío Martínez said recently.

The improvement is mainly due to the formation of Vaca Muerta in western Argentina, the Energy Secretariat said. The production of unconventional parts jumped 64% in November.

“We are moving in the right direction and this allows us to promote a key sector for the growth of Argentina,” said Martínez.

After a general collapse in 2020, oil and gas activity has now exceeded pre-pandemic figures, Martínez said. “In a world of uncertainty, oil and gas production in Argentina gives the country certainty.”

Natural gas production reached 128 million cubic meters / day (Mm3 / d) in November, up 10% from the same month last year. Unconventional games grew 40.9% in the same comparison.

Earlier this month, Argentina’s government announced an infrastructure project to further boost natural gas production from Vaca Muerta and reduce the country’s dependence during the winter months on liquefied natural gas imports. (LNG). A second phase of the project could include potential export infrastructure, said President Alberto Fernández.

The first phase of 1.5 billion dollars would consist of building the Néstor Kirchner gas pipeline of 24 Mm3 / d. The pipeline would extend from Tratayen to Neuquén to Salliqueló in the province of Buenos Aires. Other construction works include upgrading the Gasoducto Norte gas pipeline system, which would allow natural gas to reach northern Argentina and potentially displace Bolivian gas imports.

The news comes as Argentina emerges from a winter of high LNG needs. Infrastructure bottlenecks in Neuquén have also slowed the growth of domestic production.

In a bill on the promotion of hydrocarbons sent to Congress in September, the Argentine government declared that natural gas would be an essential part of the country’s energy transition. The bill includes price stabilization mechanisms and ensures that volumes produced for export will benefit from preferential tax rates and access to capital markets. This would be in addition to current incentive programs in the sector.

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