The Spanish company Repsol has made a huge oil discovery, drastically improving Argentina’s potential to profit from energy and potentially attracting more investors to exploit shale oil.
Repsol made its discovery in a huge shale oil deposit in the Vaca Muerta basin of Argentina’s Neuquen province. The find is reported to have about 927 million barrels of recoverable oil and natural gas, 741 of the barrels are oil.
The Boston Globe reports that shares in Repsol (MCE: REP) “soared” just a day after the find was announced. Shares rose 6.3 percent by the close of the trading day in Madrid and climbed 6 percent in afternoon trading in New York.
According to MSN Nine News: Finance, “Former Argentine Energy Minister Jorge Lapena said it’s a ‘spectacular announcement’ but that the reserves have yet to be proven and that economic and environmental studies still need to be carried out.”
Lapena also told reporters that if proven true, this find will represent 40 percent of Argentina’s oil reserves.
The find in Argentina still does not match Brazil’s recent deep-sea oil discoveries, which experts say could produce up to 55 billion barrels of oil. And let’s not forget to mention Venezuela; South America’s largest oil exporter has a proven 296.5 billion barrels in crude reserves.
The discovery in Argentina is still a remarkable find and could lead to increased oil output and will open the doors for other areas to be explored.
Repsol had not yet responded to questions regarding how fast the oil can be brought to production and at what cost. However, MSN Nine News: Finance reports Kristian Rix, a spokesman for Repsol, said that “because 15 vertical wells have already been drilled in the area and are producing 5,000 barrels a day of shale oil.” Rix added that because there is already an infrastructure in existence, drilling new wells is a relatively fast process.
Repsol has said that the shale oil will be extracted through the use of hydraulic fracturing, or “fracking.”
Repsol YPF SA is based in Spain but conducts operations in over 30 countries worldwide. Repsol owns oil rights to 12,000 square kilometers of the basin, but has just scratched the surface when it comes to exploring the property.
Until Next Time,