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Argentina's Mendoza eyes open-ended rounds for E&P licenses to spur investment

Increase font size  Decrease font size Date:2020-09-15   Views:19
Mendoza, the fourth most productive oil province in Argentina, is studying a new licensing model of open-ended rounds to attract investment, including to develop its acreage in the Vaca Muerta shale play, the provincial government said.

"The idea is to create a model with the particular conditions of each block and set a starting date," Estanislao Schilardi, director of hydrocarbons in the western province, said of the new system in a statement late Sept. 10. "For example, every three months the envelopes are opened, and the blocks without offers will remain in the running."
This would be a change from the practice of periodically calling auctions for a set number of blocks and picking winners based on the best bid.

Schilardi said the system of permanent licensing rounds has been proven to work well in Canada and Colombia, adding that it helps to gauge the interest in the different blocks available in the province. The official could not be reached Sept. 11 for information on when the new system could start.

Mendoza has the potential to increase output of shale oil and gas from Vaca Muerta, one of the world's biggest shale plays.

About 40% of the play's acreage runs under the province in the south on the border with Neuquen, where most of the play's development is underway thanks to its large number of service companies and the availability of infrastructure, including for exporting crude via the Atlantic or the Pacific.

Mendoza, however, also holds largely untapped heavy oil resources, which government officials there have said could prove to be a good complement to the light shale oil for refinery crude blends.

Mendoza produced 11% of the country's 472,000 b/d of oil and 1.9% of its 126 million cu m/d of gas in June, according to the latest data from the Argentina Oil and Gas Institute, an industry group.
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