World News – United States – Argentina Unveils $ 5 1B Grant to Decoy Shale Drillers

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(Bloomberg) – Cash-strapped Argentine government says it can find $ 5 billion to give to natural gas drillers in a bid to resuscitate the country’s Vaca Muerta shale slab and prevent a surge of fuel imports

The four-year grant program announced last week will cost Argentina more than $ 1 billion a year, including $ 15 billion in 2021, at a time when the government struggles to regain investor confidence in the following a debt restructuring and has not recorded a monthly budget surplus for a year

Drillers may be wary after previous subsidy programs have seen producers experience difficulty receiving payments and confusion over the rules Energy Secretary Dario Martinez said spending on subsidies was still better than the alternative of buying liquefied natural gas cargoes, even though LNG is cheap at the moment

« We did the analysis and we are really benefiting from it, » Martinez told reporters in Buenos Aires on Wednesday. The government has factored the LNG crisis into its calculations and estimates it will save another $ 2.6 billion from 2021 to 2024 by subsidizing drillers instead of importing fuel

Vaca Muerta in Patagonia is the second largest shale gas formation in the world Production in this country was lagging even before Covid-19 rocked the markets due to the overabundance of supply and Pipeline restrictions The surge in gas production at Tecpetrol SA, a unit of billionaire Paolo Rocca’s Techint empire, came just as Argentina’s economy began to contract, slashing prices and curbing drilling

The latest grant program hopes to attract $ 5 billion in investment and a dozen drill rigs, Martinez said Companies participating in an auction next month for three-year supply contracts may receive a maximum of $ 3 70 per million British thermal units, with the government covering the difference between winning bids and prices currently paid by consumers of $ 2 30 Other natural gas pools, not just Vaca Muerta, are eligible

State-owned YPF SA will likely be one of the biggest beneficiaries, and the government has also had talks with Pan American Energy LLC, Total SA, Cia General de Combustibles SA and Pampa Energia SA, Martinez said. He is also in talks with Tecpetrol as it is unclear whether the company will be able to participate as it pursues a legal battle to get a better rate under a previous program. Tecpetrol says it is waiting for full details of the new program to be released to find out where it stands

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Argentina, shale, natural gas, Vaca Muerta, YPF

News from around the world – United States – Argentina unveils $ 5 1B grant to decoy shale drillers


SOURCE: https://www.w24news.com

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