The decision by Oklahoma’s Continental Resources to double down on its commitment to drilling in Argentina shows the reported competition by oil and gas companies to explore the country’s Vaca Muerta shale basin. It also reveals Continental just might have an edge in the international competition for the South American shale play.
OilPrice.com reports the world’s shale exploration and production is gaining momentum outside the U.S. and Argentina’s Vaca Muerta is at the top of oil and gas companies such as Continental Resources. Harold Hamm’s company put some drilling on hold in North Dakota earlier in the year and announced in January it had made a second buy in the South American country’s oil production zone.
President and CEO Doug Lawler announced at the time the company had signed an Assets Sale and Purchase Agreement with Pan American Energy in acquiring four blocks located within the Vaca Muerta shale play.
“Vaca Muerta is one of the most compelling shale plays in the world, and we’re thrilled to continue to invest in Argentina and build Continental’s position through this agreement with Pan American Energy,” said Lawler. “PAE is a highly capable operator with deep basin experience. We’re eager to learn from PAE and share Continental’s unconventional expertise to advance the Vaca Muerta.”
With the Strait of Hormuz shut down by the war with Iran, the Vaca Muerta is becoming more attractive and without the dangers of being attacked by Iran’s drones, missiles and small boats. Crude oil ships would not be in danger or stalled as they are now by Iran or by the U.S. naval blockade. Plus, the Vaca Muerta is reportedly outperforming even the Permian Basin in the U.S. along with the Bakken play where Hamm’s Continental Resources made its name and fortune.
The Argentinian shale play is anticipated to produce more than 1 million bpd by the end of the decade. Some are already calling it the Argentinian Permian. Experts believe its recoverable resources are close to 16 billion barrels of oil and 308 trillion cubic feet of natural gas, making it the world’s second-largest shale gas deposition and the fourth-largest shale oil resource.
The South American play had a slow start this year but now it’s booming and crude oil production is up by nearly 16% from a year ago. It tops 800,000 barrels per day As a result, Argentina is now the fourth-largest oil producer in Latin America—a position that may improve in the future as the government prioritizes the development of the local energy industry, encouraging infrastructure projects aiming to boost the offtake capacity of the Vaca Muerta, reported Oilprice.com.
For Continental Resources, a company that developed operations in the Anadarko Basin, the Bakken in North Dakota and the Permian Basin of West Texas and Southeast New Mexico, it is a venture into foreign drilling.
“These recent transactions in Argentina strengthen Continental’s long-term value strategy: participating in world-class resources here and abroad, accelerating basin learning through ongoing development exposure, and applying that knowledge to drive robust results over time,” Lawler added. “We take a long-term view of resource development, regardless of geography. As I like to say, ‘The rock doesn’t know what country it’s in.’”