Argentina

Argentina has world-class hydrocarbon resources, including shale reserves that rank near the very top globally. But the country’s conventional oil and natural gas production has been sagging for several years, and by 2011 Argentina had flipped from being a net energy exporter to a net importer. It has also been a frequent recipient of LNG cargoes from Cheniere Energy’s Sabine Pass liquefaction plant/export terminal in Louisiana. Things have been turning around of late, though, and there may no longer be a reason to cry for Argentina. Investment in the country’s Vaca Muerta shale play — whose oil and gas potential has been compared to the Eagle Ford Shale in South Texas — is ramping up, drilling and production results are pouring in and at least some midstream infrastructure is being developed to handle what could someday become a Latin American shale boom. Today we take a mirada fresca (or fresh look) at the situation.

Lately, it’s not just liquefied natural gas (LNG) prices that are headed south, it’s LNG cargoes too.

Over the past six years surging U.S. hydrocarbon production from shale has exceeded domestic demand in many cases – leading to the development of export infrastructure. Large volumes of natural gas liquids (NGLs) such as propane are already being exported. Natural gas exports in the form of liquefied natural gas (LNG) are about to start and the recent end to federal restrictions offers the possibility to increase crude exports if they become competitive. A critical assumption behind all these export opportunities is that the U.S. continues to be the only country (except Canada to a lesser degree) to successfully “crack the code” in shale exploitation to produce commercially significant volumes competitively. This assumption would be turned on its head if competing countries like Mexico, China, Poland, Argentina and the U.K. are able to unlock their own shale potential. Today we review RBN Energy’s first Drill Down report of 2016, which considers the many “below-ground” and “above-ground” factors that will determine whether and how quickly, shale development becomes a worldwide phenomenon.