Fri, May 23, 2014 - Page 15 News List

ExxonMobil finds shale oil deposit in Argentina


A protester in a gas mask stands outside Argentina’s state-owned energy company YPF’s building in Buenos Aires on Wednesday.

Photo: Reuters

ExxonMobil Corp said on Wednesday that it has found a promising shale oil deposit in southern Argentina, on par with some of the best of its kind in the US.

The US oil giant started work last year in Vaca Muerta, in Neuquen Province, in the southern Patagonia region.

Vaca Muerta is described as a huge deposit that ranks Argentina second in the world for shale gas reserves and fourth for potential shale oil reserves.

The US is the world leader in shale oil and shale gas reserves, as well as in related technology.

Testing of the non-conventional well, which would require fracking, showed potential for a flow of 770 barrels per day, the company said in a statement.

“It is a very important [potential] well, in terms of likely volume, on a par with the best [non-conventional] sites in the US,” industry expert Eduardo Barreiro said.

A judge earlier this month said Argentine President Cristina Kirchner could be investigated for abuse of authority in a major Chevron fracking deal.

Chevron Corp and YPF SA also this month unveiled plans to spend another US$1.6 billion to develop the Vaca Muerta shale formation for oil and gas projects.

Kirchner is motivated to stop spending billions of US dollars on energy imports every year and to develop Argentina’s energy self-sufficiency. The nation’s energy import costs hit US$9 billion last year, which is a top economic concern, because Argentina is losing its hard currency reserves on imports.

Argentine oil giant YPF has dug 184 wells and is on target to have 300 open by year’s end.

New techniques for extracting oil and gas, notably hydraulic fracking involving the injection of water and chemicals deep into rock to release reserves, have led to booming production in North America.

The cheap resource is causing upheaval on world markets in what the International Energy Agency describes as an energy revolution.

Yet critics say fracking increases the risk of contaminating drinking water, suggesting untold dangers to humans and livestock, alongside fracking-related earthquakes and other pollution.

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