"In 2023, the biggest bottleneck we had was the infrastructure and it is not 100% resolved," explained its CEO Miguel Galuccio, who mentioned the works of Oleoductos del Valle (Oldelval) to double its oil evacuation capacity through the Vaca Muerta Sur pipeline, which would reach from Neuquén to a port in Rio Negro and the Vaca Muerta Norte pipeline to reach Chile.
Vista, Argentina's second largest unconventional hydrocarbons operator, will invest a total of around $1.1 billion in 2024 to accelerate production at Vaca Muerta, its founder and CEO Miguel Galuccio told Reuters.
The Vaca Muerta formation, one of the largest shale reserves in the world, has become Argentina's main hope for reversing a historic energy deficit that has hit its trade balance and for obtaining the foreign currency that its economy so badly needs.
The company will invest in more wells and infrastructure works to increase transportation capacity from Vaca Muerta, Galuccio said in an interview from New York after celebrating five years of listing on the New York Stock Exchange (NYSE), where the stock rose more than 460% in dollars since its launch.
"In 2023, the biggest bottleneck we had was the infrastructure and it is not 100% resolved," explained Galuccio, who mentioned the works of Oleoductos del Valle (Oldelval) to double its oil evacuation capacity through the Vaca Muerta Sur pipeline, which would reach from Neuquén to a port in Rio Negro and the Vaca Muerta Norte pipeline to reach Chile.
Vista, which added a third drilling rig this year and will bring in a second fracking set, went from producing 50,000 barrels of oil equivalent per day (boe/d) in 2023 to 65,000 in the second quarter of this year, when it will average production of 70,000 boe/d and reach 85,000 boe/d in the fourth quarter, Galuccio said.
The company plans to reach 100,000 boe/d of production by 2026 and 150,000 barrels by 2030.
Its lifting cost was $4.50 a barrel in the second quarter, although Galuccio said the company could lower it to $4 a barrel by 2026.
"We started with 18 (dollars) of 'lifting cost', we have been going down. Today we are reaching a technical limit," he explained. However, he considered that "we could aim for 4 dollars, we could still get 50 cents from now until 2026."
Galuccio, a petroleum engineer who worked for many years outside Argentina, returned to the country in 2012 to take over as CEO of YPF, the country's largest oil company - controlled by the State - from where he promoted the development of Vaca Muerta, the second largest unconventional gas reserve in the world and the fourth largest oil reserve, until he left that position in 2016.
"In 2012, Vaca Muerta was for believers. Today, Vaca Muerta is for engineers," Galuccio recalls about the beginnings of exploration.
But the country is still far from massively developing Vaca Muerta, which covers an area similar to that of Belgium.
"Vaca Muerta needs more 'Vistas', more investment," said Galuccio and highlighted as positive the approval in Congress of a law that included the liberalization of exports and the non-intervention of the Government in the prices of the local hydrocarbon market.
"These two concepts are good for the industry, for an industry that is important for the country to generate foreign currency," he explained. "The third one that could help a lot is to lift the cepo (capital controls) because it continues to be a restriction for foreign investors."
Galuccio estimated that Vaca Muerta could produce 1 million barrels per day by 2030, which would allow the country to generate some $20 billion per year.
"A humid plain with no risk of rain," he explained, referring to the importance of the rural sector for the country as a generator of foreign currency.
