Looking to attract investment projects to the country, officials in southwest Argentina’s Neuquén province are planning to hold three licensing events that offer operating packages laced with generous price incentives, according to a report by Platts.
As a part of this deal, the Argentinean government is allowing producers to price their gas field output from $4.00/MMBtu to $5.00/MMBtu –a sizable increase from the domestic average of $2.49/MMBtu. In addition, extra price incentives have been placed on unconventional wellhead projects, such as those targeting shale or tight gas reserves. The government has agreed to honor prices from $4.50/MMBtu to $7.50/MMBtu on these types of ventures, according to Jorge Sapag, the governor of Neuquén.
“These prices are encouraging investment in exploration and production,” said Sapag at a press conference on Nov. 29.
Gas y Petroleo del Neuquén, the province’s oil company, has been slated to lead the licensing rounds.
According to industry estimates, the upswing in investment will catapult shale gas production in Neuquén by approximately 11.9 MMcf/d to a total of 21.7 MMcf/d. In 2009, the basin’s output was marked at 9.8 MMcf/d.
The country’s federal government is hopeful that targeting these unconventional resources will lessen its dependence on LNG and Bolivian gas imports. According to the report, Argentina is currently importing 55% of its resources.
An announcement with further details on the price incentives is scheduled to be made in early December. Companies such as Apache Corp., ExxonMobil and Total have already voiced interest in spearheading unconventional gas projects in the country.
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