- Official calls ruling erroneous
- Suspension would limit potential oil output growth
By Charles Newbery/Platts
BUENOS AIRES
EnergiesNet.com 02 17 2022
Argentina’s government has said it is appealing a court ruling that suspended offshore exploration at a block by Argentina’s state-backed YPF, Shell and Equinor, where one of the companies had said large oil production can be expected.
Energy Secretary Dario Martinez said late Feb. 15 that the ruling ignores the international standards the companies will use to protect the environment, adding that halting the exploration will stymie potential oil and natural gas production growth for the country.
“This ruling is based on erroneous, mistaken precepts unrelated to the oil activity that is going to be developed,” Martinez said in a statement.
He added that the ruling “deprives the country of developing and taking advantage of the energy resources it needs.”
Argentina is seeking to build its oil and gas production, now at 545,000 b/d and 128 million cu m/d, respectively, to eliminate imports and become a global exporter.
A judge in Mar del Plata, a coastal city in Buenos Aires province, suspended the exploration project last week, less than two months after the government awarded the permit, citing risks of environmental damage. The project has drawn the ire of environmental groups, which have held frequent protests in Mar del Plata.
YPF, the country’s biggest oil and gas producer, has said that the project in question, called CAN 100 and located 300 km (186 miles) off the coast of Mar del Plata, has the potential to produce up to 200,000 b/d, nearly the company’s current production of 253,000 b/d nationwide.
YPF farmed Norway’s Equinor into the project in 2019 and subsequently the Anglo-Dutch company Shell. The companies, which are also exploring other blocks in the North Argentina Basin, plan to invest a total of $6 billion in developing CAN 100.
On Jan. 10, YPF chairman Pablo Gonzalez said CAN 100 and other offshore projects could make Argentina the next Brazil, which has become a leading source of offshore oil over the past few years.
Most of Argentina’s offshore acreage, except in the far south off the coast of Tierra del Fuego, is unexplored. CAN 100 is one of the first projects to get underway since a 2019 offshore licensing round attracted a total of $720 million in exploration investment by companies including YPF, Equinor and Shell, as well as ExxonMobil, France’s Total and UK-based BP.
spglobal.com 02 16 2022
