Black gold: Argentinian Vista presses oil export accelerator
Argentina-focused Vista Energy raised its investment forecast for this year as the lucrative oil export market flashes brightly on the radar of the company and its upstream peers.
Vista plans to spend US$500 million, up from US$400 million originally, citing well drilling and tie-in work in the second half of this year on Vaca Muerta’s base shale oil assets Bajada del Palo Oeste and Aguada Federal and the Bajada del Palo Este pilot project.
Vista oil production climbed 17% year-on-year to 36,900 bpd in the second quarter, with shale oil accounting for 74% of total production.
Exports were $147 million on total revenue of $294 million in 2Q22, compared to $77.1 million on revenue of $208 million in 1Q22 and $26.8 million on revenue of $165 million in 2Q21.
Vista raised its 2022 production forecast to 47,000 boe/d from an initial forecast of 46,000 to 47,000 boe/d, adding that the 2022 output rate was likely around 52,000 boe/d.
Oil prices realized at USD 99/bbl in the export market in the second quarter, net of export tax, combined with saturated domestic demand for Vaca Muerta crude, heighten the attention of Vista and its peers in the export market. Domestic sales are reaching a locally set price, which was around US$63/bbl in Q2.
Vista’s expected production growth this semester is expected to drive lift costs of $7.5/boe for 2022.
Vista expects exports to account for a growing share of its production in Argentina over the next few years, where midstream players are poised to add transportation and storage capacity to support growth in the Neuquén Basin. , home to Vaca Muerta.
Vista CEO Miguel Galuccio said on the company’s 2Q22 earnings call, “We’re probably averaging 40% today. [exports as a proportion of sales volumes]. We see 2024 around 50% and 2026 around 60%”.
Galuccio said other companies are following suit and Vista’s export plan is “pretty aggressive”.
“Like more Medanito [crude oil] production comes into play at Vaca Muerta, the country will have to export more volumes and we will play a part in that,” Galuccio said.
Argentina already produces more crude oil than the local refining sector can process. However, the country tends to import high quality gasoline and diesel.
For the production of diesel – which is scarce in the country – refiners need heavier crudes from fields in the south of the country.
The government of Neuquén province, home to the bulk of the Vaca Muerta formation, said that in January-June producers in the jurisdiction exported 8.2 Mb, up 222% year-on-year. generating revenues of $797 million.
In June, Vista was the province’s third-largest exporter, recording overseas sales of $382 trillion. Neuquén’s biggest exporter in June was Malaysia’s Petronas, with $488 trillion, the provincial government said. With a 50% stake, Petronas is a partner in the La Amarga Chica block, operated by state oil company YPF, which produced 6,248 m3/d (39,298 bpd) in March. This makes it the third most productive oil concession in the country, according to operator data from the Federal Department of Energy. The Bajada del Palo Oeste de Vista is the fourth most productive concession.
Neuquén’s goal is to reach 700,000 bpd of oil production by 2030. The province’s target for this year is 308,000 bpd. Production in May was around 279,000 bpd, according to data from the province’s Department of Energy and Natural Resources.
Nationally, overall oil production averaged 584,000 b/d in May, up 14% year-on-year, as gas production rose 12% to 136 million m3/d. Unconventional oil production averaged 241,000 b/d, up 57% year-on-year, while unconventional gas production was 76 Mm3/d, up 39% from one year to the next.
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