|Start of development||2011|
|Start of production||2011|
|Current production of oil||27,000 barrels per day (~1.3×106 t/a)|
|Estimated oil in place||126 million tonnes
(~ 147×106 m3 or 927 MMbbl)
Vaca Muerta (in Spanish literally Dead Cow) is a geologic formation of Jurassic and Cretaceous age, located at Neuquén Basin of Mendoza Shelf in Argentina. It is best known as the host rock for major deposits of tight oil (shale oil) and shale gas.
The large oil discovery in the Vaca Muerta Formation was made in 2010 by the former Repsol-YPF, which announced the discovery in May 2011. The total proven reserves are around 927 million barrels (147.4×106 m3), and YPF's production alone is over 20,000 barrels per day (3,200 m3/d). In February 2012, Repsol YPF SA raised its estimate of oil reserves to 22.5 billion barrels (3.58×109 m3). The US EIA estimates total recoverable hydrocarbons from this Vaca Muerta Formation to be 16.2 billion barrels (2.58×109 m3) of oil and 308 trillion cubic feet (8.7×1012 m3) of natural gas, more than even the Neuquén Basin's hydrocarbon-rich Middle Jurassic Los Molles Formation holds.
The Vaca Muerta Shale is a continuous tight oil and shale gas reservoir of late Jurassic (Tithonian) and early Cretaceous (Berriasian) age formation. The formation covers a total area of 30,000 square kilometres (12,000 sq mi). The shale is at a depth of about 9,500 feet (2,900 m) where it has been found productive of oil and gas. Although called a shale, and with a total organic carbon content varying from 1 percent to 5 percent, the Vaca Muerta is predominately marl and consists of mature black shales, marls and lime mudstones. Formed in a marine environment with little clay and brittle rock the deposit is 30 to 1,200 metres (98 to 3,937 ft) (usually over 400 metres (1,300 ft)) thick extending throughout the basin. It is gradationally overlain by the Valanginian Chachao Formation.
Although in the name Vaca Muerta Formation was introduced to the geological literature in 1931 by an American geologist Charles E. Weaver, the highly bituminous shales in the Salado river valley in southern Mendoza were described in 1892 by Dr. Guillermo Bodenbender. German paleontologists Beherendsen and Steuer determined the Tithonian age of these shales. Where it surfaces, the Vaca Muerta Formation has been the site of paleontological finds: the crocodylomorph Cricosaurus and possibly Geosaurus, the ichthyosaur Caypullisaurus, and the pterosaurs Herbstosaurus and Wenupteryx.
Oil and gas
The Vaca Muerta Shale has long been known as a major petroleum source bed for other formations in the Neuquén Basin, which has had oil production since 1918. Wells producing from the Vaca Muerta itself are in several oil fields, including the Loma La Lata, Loma Lata Norte and Loma Campana fields.
Repsol-YPF recognized the productive potential of the Vaca Muerta Shale of the Neuquén Basin, and completed Argentina's first shale gas well in July 2010, at the Loma La Lata field. Then in November 2010, the company completed a tight oil well in the Vaca Muerta Shale in the Loma Campana area. The first horizontal well in the Vaca Muerta was drilled and completed in August 2011. By October 2012, 31 wells had been drilled and completed, and another 20 had been drilled and were waiting completion. The drilling had extended the Vaca Muerta field to an area of at least 300 square kilometers.
One problem in attracting development was Argentina's price controls on natural gas, keeping the price down to US$2.00-$2.50 per million BTU. However, the government exempted tight gas from controls, and in 2011 the Vaca Muerta gas was selling for US$4–$7. The higher gas prices attracted major oil companies, including ExxonMobil, Total S.A., and Chevron Corporation to Vaca Muerta.
In May 2013, YPF announced that it had negotiated a joint venture in which Chevron would invest US$1.5 billion drilling 132 wells on the Loma Campana field. Chevron's participation was complicated by efforts by the plaintiffs who obtained a judgement in Ecuador with respect to actions by Texaco in the Lago Agrio oil field to collect the judgement from Chevron's Argentine assets. On September 24, 2013, YPF announced that Dow Chemical Company subsidiary Dow Argentina had signed an agreement to drill 16 natural gas wells in the El Orejano block of the Vaca Muerta formation over a 12-month period, with Dow contributing US$120,000,000 and YPF US$68,000,000. Shell Argentina CEO Juan Jose Aranguren was quoted on December 10, 2013, as saying his company, with 4 producing wells in Vaca Muerta and 2 more drilling, would increase capital spending in Argentine shale to "about" US$500 million in 2014 from US$170 million in 2013. Luis Sapag, of the Sapag family which has dominated Neuquén politics for half a century, was reported by Bloomberg in December 2013 as saying that the YPF-Chevron joint venture would invest as much as US$16 billion if the US$1.2 billion pilot venture was successful by March 2014, which would generate almost US$9 billion in royalties for Neuquén.
In February 2014, Archer Ltd. announced it had an "approximately USD 400 million" contract with YPF to provide "five new built drilling rigs to support YPF's development of unconventional shale resources in the Neuquén area in Argentina." On February 18 of the same year, YPF announced that it had signed an memorandum of understanding with PETRONAS, the Malaysian state oil company, on a possible investment in the 187 square kilometer Amarga Chica zone of the Vaca Muerta formation; YPF also indicated that its current production in Vaca Muerta was over 20,000 barrels of oil equivalent a day from over 150 fracked wells using 19 fracking drill rigs. Helmerich & Payne disclosed on March 5, 2014, that it had contracted with YPF to deploy 10 drill rigs under five-year contracts from the United States to Argentina between the third quarter of 2014 and the first quarter of 2015 to work in the Vaca Muerta play in addition to the nine rigs Helmerich & Payne already had in the country. On April 10, 2014, Miguel Gallucio of YPF announced that Chevron had decided to continue its partnership with YPF in the "massive development" of Vaca Muerta; the US$1.24 billion pilot program financed by Chevron and ended in March had developed 161 fracked wells in a 20 square kilometer area. The new phase would frack 170 additional wells this year with a joint investment of over US$1.6 billion, with YPF continuing as operator. The goal agreed upon for future years would be to develop an area of 395 square kilometers with over 1500 fracked wells producing over 50,000 barrels of oil and 3 million cubic meters (over 100 million cubic feet) of natural gas a day. Chevron and YPF also agreed on a US$140,000,000, four-year exploration project to drill and analyze 7 vertical and 2 horizontal wells in a 200 square kilometer area (Narambuena) in the Chihuido de la Sierra Negra concession, to be financed by Chevron with YPF as operator. In July 2014 a Credit Suisse analyst reported YPF's unconventional oil production had reached ca. 27,000 barrels a day by late June of that year.
Vaca Muerta is divided into different development blocks. Consortium of YPF (50%) and Chevron (50%) develops General Enrique Mosconi concession, including Loma La Lata Norte and Loma Campana fields. Consortium of Petrobras (55%, operator) and Total S.A. (45%) develops the Rincon de Aranda concession. The Los Toldos blocks are developed by the consortium of Americas Petrogas (45%, operator of the blocks), ExxonMobil (45%) and Gas y Petroleo del Neuquén (10%). Consortium of Shell (65%, operator) Medanito (25%) and Gas y Petroleo del Neuquén (10%) develops Águila Mora and Sierras Blancas areas. Consortium of Wintershall (50%, operator) and Gas y Petroleo del Neuquén (50%) develops the Aguada Federal block. ExxonMobil is the operator of the Bajo del Choique block and has an 85% working interest in it, with Gas y Petroleo del Neuquén holding the remaining 15%; they announced their first discovery on the block on May 21, 2014 Also Madalena Ventures, Azabache, Tecpetrol, and Pan American Energy participate in exploration and production. Apache Corporation was active in the Vaca Muerta in 2012-2013, but agreed to sell all its Argentine assets to YPF for US$800 million in an agreement signed February 12, 2014.
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