Surge In Shale Production Has Led To A Glut Of Natural Gas In Argentina -- Will Cut Back On Conventional Drilling; Focus On Shale -- May 10, 2019

Okay, this is a very, very interesting story. One really needs to read the entire story linked at Platts to get the full story. I may have to re-do this entire post ...  in fact, forget this entire post ... just go to the linked Platts story; don't pass "go" -- just go to the story ...

Earlier today I posted a link to a story whose "analysts" said that the shale boom was about to go bust (no timeline given). Apparently Argentina did not get the memo. From Platts S&P Global (see link above), data points:

• Argentina's largest fossil fuel producer, YPF, will now focus on shale for production growth
• will shift away from conventional oil and gas
• the shift is aimed at reversing an expected decline in production this year
• YPF's production dropped almost 12% year-over-year, 1Q19
• dragged down by -- wow, look at this -- a 20% plunge in natural gas production
• the plays are mentioned 
• shale oil production is offsetting the conventional production decline
• YPF is running six shale oil pilots and expects to go into full-scale development on two of them in 2020 and 2021
• partnering with Schlumberger, Equinor, Chevron
• expects to take its Vaca Muerta rig count to 18 by the end of the year; up 14 from current level
• target: drill more than 100 horizontal wells this year 
• to handle the expected increase in shale oil output, the company is expanding the oil treatment capacity at a plant in Loma Campana to 130,000 b/d from 75,000 b/d by the end of the year, and building two others with 50,000 b/d of capacity each 

But then look at this:

With gas, the company is scaling back investment plans, which is one of the reasons for the drop in production.

A surge in gas production over the past few years, led by Vaca Muerta, has created a glut of supply, forcing YPF and other companies to slow production, and even temporarily shut wells. A setback stems from the sharp seasonal fluctuations in domestic demand, which go to more than 140 million cu m/d in the cold season from 90 million cu m/d in the October to April warm and mild seasons.

Spanish Harlem, Rebecca Pidgeon