Argentina to tender block in world’s top shale gas and oil field

Argentina is getting ready to launch a tender on a section of its giant Vaca Muerta formation, in the Patagonian province of Neuquén, which holds the world’s second-largest shale gas reserves and the fourth-biggest shale oil reserves.

The Loma Amarilla Norte block, in the northern half of what was originally a larger section of Vaca Muerta, has experienced significant exploration activity in recent years. It’s also very close to ongoing developments, including State-owned energy firm YPF’s Bajo del Toro block.

The province of Neuquén, local news outlet El Constructor reports, is close to finish details for the tender, but it “will wait for the right moment” to start the bidding process.

Argentina was an early player in the world of oil and gas, founding YPF in 1907. In recent years it has confirmed its potential with the world’s second-largest shale gas reserves and the fourth-largest shale oil reserves, concentrated in the Vaca Muerta formation.

Argentina’s Permian Basin

The success of Vaca Muerta, often compared to the Permian Basin in the United States based on its vast potential, is key for the South American nation.

Argentina has tried and failed for decades to break free of cyclical crises and is grappling with inflation above 50% and $100 billion in sovereign debt.

The country had hoped that its giant Vaca Muerta oil and gas deposit might help it to emulate the US shale boom. Increasing demand for renewables over oil and gas, paired with the global collapse of crude prices, threaten to shatter Argentina’s energy dreams.

Oil prices suffered their biggest fall in early March since 1991, when US forces launched air strikes on Iraqi troops following the invasion of Kuwait.

Prices have slightly recovered in the past two weeks, touching $40 a barrel on Wednesday for the first time in three months.