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Argentina's upstream sector is finally coming out of a lengthy holding pattern. In recent years, exploration and development activity in Argentina had been reined by uncertainty over the prospects for natural gas export pipelines.
That uncertainty was complicated further by Repsol SA's acquisition of Argentine giant YPF SA and Chevron Corp.'s acquisition of big Argentine independent Petrolera Argentina San Jorge SA, as a wait-and-see stance took hold in the aftermath of those big mergers.
The sector was further buffeted by the collapse in oil prices in 1998 and early 1999.
But Argentine E&D action has been picking up steadily in recent months. And by all accounts, the sector is on the verge of changing faster than anyone would have imagined just a year ago.
Moreover, a roster of gas transmission project ventures linking to neighboring countries (OGJ, Aug. 9, 1999, p. 37) and the forthcoming divestment of assets belonging to the Repsol-YPF energy titan is helping to breathe new life in the industry.
Indeed, with upstream ambitions running high once again, "spending" and "increased investments" have become the prevailing buzzwords in Argentina's petroleum industry. And most of that surge in outlays is targeted for a robust slate of exploration and development activity.
Fresh from its $15 billion buyout of Latin America's leading oil equity, Repsol-YPF wants to maintain its stronghold in Argentina, while still yielding to a government condition to shed part of its share in the domestic sector.
According to Repsol-YPF General Director of Exploration & Production Dante Ruben Patritti, the new company will spend $800 million for E&D this year. Expenditures will fuel the company's aggressive expansion plan, averaging $1.2 billion/year in upstream investments over the next 10 years, he said.
Although the firm's operations span the continent--from Offshore Guyana to Tierra del Fuego--Patritti said Argentina's Golfo de San Jorge basin would be the focus of domestic spending.
"Some 60% of investments would be focused on its oil operations and the remaining 40% on its natural gas holdings," he said.
Patritti also said the company plans to drill around 500 wells in the region, of which 200 will …