This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 2/22/2017
Overview
Shale Gas and Shale Oil Industry Statistics - Argentina

Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources:
Total Local Production: Unofficial estimates based on industry reports
Total Exports: Nosis/Exi-Net export/import database
Total Imports: Nosis/Exi-Net export/import database
Imports from U.S.: Nosis/Exi-Net export/import database
 
Argentina’s energy industry is experiencing significant challenges. In 2011 the country became a net importer of energy for the first time since 1984. In January 2015, Argentina’s energy imports decreased in volume by approximately 46 percent year-on-year, though lower prices and favorable weather conditions played important roles.
 
Shale-oil and shale-gas reserves in the Vaca Muerta formation, located in the Province of Neuquén is estimated to hold 16 billion barrels of shale oil and approximately 310 trillion cubic feet (8.8 trillion cubic meters) of shale gas, which would give Argentina the world’s fourth-largest reserves of shale oil and second-largest of shale gas.
 
It is estimated that developing Vaca Muerta will require between USD 70-90 billionYPF, Argentina’s state-owned company and major oil & gas producer, signed a strategic partnership agreement with Chevron, comprising an initial investment of USD 1.24 billion dollars in Vaca Muerta as part of its joint venture with YPF. Chevron plans to spend approximately USD 15 billion to develop their positions in Vaca Muerta.
 

Although the YPF-Chevron had a positive effect in the industry, YPF continues efforts to attract more international partners to develop Vaca Muerta, which could change Argentina’s energy situation a few years from now.  YPF has also signed agreements with Petronas of Malaysia and Dow Chemical, among other players.  Recently, the GoA signed an MOU with Sinopec from China.  In 2014, YPF reported an 8.7 percent increase in oil production and 12.5 percent in gas, respectively.  These results are encouraging, and convey positive signs to the market and potential investors.  However, overall Argentine production of oil and gas continues to decline.

There are currently approximately 300 shale wells in production in Vaca Muerta, which only compares to the U.S. and China. Approximately 107 drilling rigs are employed, the highest number since 1982, and an increase of over 100 percent since 2012.
 
Market preference for US technology is significant, especially since oil service companies experienced with U.S. technology and equipment are present in Vaca Muerta.  US companies with operations in Argentina include Halliburton, Schlumberger, Weatherford, Baker-Hughes, Helmrich & Payne, Oil States, among others.


The U.S. Commercial Service encourages U.S. companies to contact us in order to learn more about the current business climate, market trends, and potential business opportunities.
 
Sub-Sector Best Prospects
 
Relevant products/services in demand follow:

Products:
  • Biocides
  • Chemicals & Gases
  • Downhole Tools
  • Drill Bits & Reamers
  • Drilling Equipment
  • Drilling Fluids
  • Friction Reducers
  • Gelling Agents
  • Proppants
  • Sand Proppants
  • Stimulation Products
  • Tubular Goods
 
Services:
  • Prospecting
  • Drilling Services
  • Completion & Production Services
  • Pressure Pumping Services

Opportunities

There are basically three types of end-users: Large companies (YPF, Petrobras, Chevron, Pan American Energy, Total, etc.), oil-field service companies (Halliburton, Schlumberger, H&P, Weatherford, etc.), and small local companies that increasingly compete to increase market share. The first two groups, in general, do their routine purchasing locally, either from local manufacturers, or through distributors or representatives of international suppliers, and purchase the large-ticket items through their headquarters purchasing offices. The third group typically buys from international suppliers, and seeks to take advantage whenever possible of available credit lines from 
national export financing agencies in supplier countries. Price and lead times are important factors.
 
YPF has increased its efficiency and reduced production costs by approximately 32 percent. This is also an area in which US firms can be competitive and add value to the local market.
 
It is key to identify a solid local partner with reputable market presence. Although some manufacturing and product distribution is performed throughout Argentina, most players and end users have offices in Buenos Aires. U.S. suppliers should consider a cultural adaptation of product literature into Spanish and seek to develop long-term relationships with local partners.  Personal relationships are vital to fruitful business.
 
Depending on the type of product, potential distribution channels feature local suppliers of equipment, machinery and measuring instruments to the oil and gas industry.  Also, a limited number of reputable services companies with interest in diversifying their service offerings could be a partner to reach end clients.
 
Web Resources
 
 
For additional information on this industry, including market analysis, trade events, contacts, and the products and services that the U.S. Commercial Service can provide to help you succeed in the Argentine market, please contact Marcelo Amden, Industry Specialist at Marcelo.Amden@trade.gov or (54-11) 5777-4509 and/or visit http://export.gov/argentina/.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Argentina Energy Trade Development and Promotion