Argentina could be the forefront of the next shale oil revolution, according to a report Morgan Stanley published today. Of all the areas analyzed, the Latin American country displays the most favourable conditions, and the lowest investment costs (graphic above).
La pampa could become the next big thing in shale oil, mainly for three reasons:
- Favourable geological conformation.
The Vaca Muerta basin has similar characteristics to one of the richest drilling areas in the US, the Eagle Ford basin in Texas. It is sufficiently thick and rich of liquid resources to foresee a consistent output.
Its richest area, the Loma Campana highlighted in the graphic above, is already producing 21,000 barrel of crude a day for a joint venture of YPF and Chevron.
- Urgent energetic demand.
Argentina's economy is not in good shape. Its energy balance collapsed in the last four years, as shown in the graphic above, despite having a wealth of natural resources and a developed oil industry. Argentine President Cristina Fernández de Kirchner nationalized the country's oil companies, and production collapsed, discouraging investors. So the hope is that the country's shale reserves might stimulate a recovery, if used wisely.