Argentina Oil and Gas Report Q1 2012
Business Monitor International, January 2012, Pages: 83
Business Monitor International's Argentina Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Argentina's oil and gas industry.
BMI View:
Without the price reforms and improvements in the broader operating environment needed to spur development of Argentina’s burgeoning unconventional oil and gas sector, the country faces continued production declines and a future as a net oil importer. Indeed, our forecasts, which now only incorporate small scale shale oil and gas production, see gas imports rising fourfold over the coming decade and the country becoming a net importer of oil as early as 2014. With that said, the Neuquén basin is attracting significant investment from deep-pocketed majors and large-scale development of the region could radically alter this outlook.
Highlights:
- Oil production in Argentina has been declining since the late 1990’s and BMI forecasts that trend to continue. Oil output is expected to hit a 15-year low of 718,000b/d in 2011, and is forecast to trend lower to just under 700,000b/d by 2014. The first shale/tight oil production will provide a boost to production in 2015 of around 50,000b/d; however, given current development plans in the Neuquén shale basin that boost will be short-lived, with production still hovering around the 700,000b/d level by the end of the forecast period in 2021.
- At the same time as oil production is seen falling, consumption should rise on the back of strong economic growth. That trend threatens to see Argentina, long a net oil exporter, become importdependent. Our forecasts, which envision oil demand growing at 3-4% per year, show oil consumption surpassing production of around 700,000b/d in 2020. Imports will be relatively modest but highlight the deteriorating state of Argentina’s oil sector.
- While Argentina is still holding onto its status as an oil exporter, it became a net gas exporter in 2008, and BMI forecasts imports to rise rapidly over the coming decade. The country should be able to maintain roughly flat gas production at around 40bcm per year, with a small increase forecast towards the latter half of the decade as some shale volumes come online. However, consumption will easily outpace this small increase in production. BMI estimates demand will have just exceeded 45bcm in 2011; this is forecast to reach 55bcm in 2016, before reaching almost 65bcm by 2020.
- Given the gas production and consumption trend, BMI estimates that net imports rose to around 6bcm in 2011, and forecast this to rise to almost 15bcm in 2016 and over 20bcm by 2021. The country’s gas supply deal with Bolivia means that pipeline imports should rise to around 10bcm by the end of the decade, with LNG imports meeting the remainder of the import requirement.
- Argentina’s shale oil and gas potential poses major upside risks to these forecasts. Currently initial production from YPF is the only output from shale factored into BMI's forecasts. Investment into the burgeoning sector, however, is set to rise rapidly. YPF plans to spend US$400-500mn continuing its exploration programme into 2012, and total investment in the Neuquén shale play could eventually reach US$20bn. Total, ExxonMobil, Apache and Pan American Energy (PAE) are also planning their own shale exploration programmes, which should see investment in the shale sector top US$1bn in 2012. The future of the sector, however, will depend on reforms to the domestic gas price and improvements in the broader operating environment. The Gas Plus scheme that allows production from certain unconventional projects to sell for a higher price has been a positive step, but deeper reforms will be needed.
- YPF is Argentina’s leading oil producer, with production of about 190,000b/d through the first nine months of 2011 (9M11), and with exposure to the growing shale sector looks set to hold onto that position. YPF is PAE, which produced nearly 115,000b/d of oil through 9M11. Other producers in Argentina lag far behind YPF and PAE. Brazil’s state-run Petrobras is the country’s third-largest oil producer, with output of 39,000b/d through 9M11, followed by US major Chevron, which recorded production of nearly 37,000b/d over the period.
BMI Industry View
SWOT Analysis
Argentina Oil and Gas SWOT
Global Energy Market Outlook
Table: Global Oil Consumption (000b/d), 2009-2016
Table: Global Oil Production (000b/d), 2009-2016
Regional Energy Market Outlook
Oil Supply And Demand
Table: Latin America Oil Consumption (000b/d), 2009-2016
Table: Latin America Oil Production (000b/d), 2009-2016
Table: Latin America Oil Refining Capacity (000b/d), 2009-2016
Gas Supply And Demand
Table: Latin America Gas Consumption (bcm), 2009-2016
Table: Latin America Gas Production (bcm), 2009-2016
Liquefied Natural Gas
Table: Latin America LNG Exports (bcm), 2009-2016
Argentina Energy Market Overview
Argentina – Upstream Projects Database
Industry Forecast Scenario
Oil And Gas Reserves
Oil Supply And Demand
Gas Supply And Demand
LNG
Refining And Oil Products Trade
Revenues/Import Costs
Table: Argentina Oil And Gas – Historical Data And Forecasts, 2009-2016
Oil And Gas Infrastructure
Oil Refineries
Table: Refineries In Argentina
Service Stations
Oil Terminals/ Ports
Oil Pipelines
LNG Terminals
Gas Storage Facilities
Gas Pipelines
Regional and Country Risk/Reward Ratings
Latin America Region
Composite Scores
Table: Regional Composite Risk/Reward Ratings
Upstream Scores
Table: Regional Upstream Risk/Reward Ratings
Downstream Scores
Table: Regional Downstream Risk/Reward Ratings
Competitive Landscape
Executive Summary
Table: Key Players – Argentine Oil And Gas Sector
Overview/State Role
Licensing And Regulation
Government Policy
Licensing Rounds
International Energy Relations
Table: Key Upstream Players
Table: Key Downstream Players
Company Monitor
ExxonMobil Colombia
Petrobras Energía
Chevron Argentina
Total Austral
ExxonMobil
Shell Compañía Argentina de Petróleo
BG Group
Apache Energía
Sinopec/Occidental – Summary
Bridas/PAE – Summary
Otto Energy – Summary
Others – Summary
Appendix: Oil And Gas Long-Term Forecasts
Regional Oil Demand
Table: Latin America Long-term Oil Consumption (000b/d), 2014-2021
Regional Oil Supply
Table: Latin America Long-term Oil Production (000b/d), 2014-2021
Regional Gas Demand
Table: Latin America Long-Term Gas Consumption (bcm) 2014-2021
Regional Gas Supply
Table: Latin America – Long-Term Gas Production (bcm), 2014-2021
Methodology And Risks To Forecasts
Glossary Of Terms
Table: Glossary Of Terms
Oil And Gas Risk/Reward Ratings Methodology
Ratings Overview
Table: BMI’s Oil & Gas Business Environment Ratings – Structure
Indicators
Table: BMI’s Oil & Gas Upstream Ratings – Methodology
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology
BMI Methodology
How We Generate Our Industry Forecasts
Energy Industry
Cross checks
Sources
- Apache Energía
- BG Group
- Bridas/PAE
- Chevron Argentina
- ExxonMobil
- ExxonMobil Colombia
- Otto Energy
- Petrobras Energía
- Shell Compañía Argentina de Petróleo
- Sinopec/Occidental
- Total Austral
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