Argentina's First Ultra-Deepwater Well Comes Up Dry

In a significant development for Argentina's energy sector, the country's first ultra-deepwater exploration well, Argerich-1, has been declared dry. Drilled by Norway's Equinor at the CAN-100 block in the Argentina Norte basin, approximately 300km off the coast of Buenos Aires province, this pioneering project did not yield the anticipated hydrocarbons.

The Argerich-1 well, a collaboration between Equinor, state-controlled YPF (35%), and Shell (30%), aimed to tap into Argentina's offshore hydrocarbon potential. Despite extensive drilling efforts, Equinor confirmed that no clear signs of hydrocarbons were detected. "Although we have been able to confirm the geological model, no clear signs of hydrocarbons have been found, so the well is considered dry," Equinor stated following reports by local media outlet EconoJournal.

This setback comes after previous offshore exploration attempts in Argentina's shallower waters, such as the Colorado basin, saw limited success. Historically, Argentina's offshore hydrocarbons have been predominantly extracted from the Austral basin, with gas being the primary product.

Despite this result, Equinor remains committed to further exploration in the region. The company holds full ownership of the CAN-108 license and a 50% stake in CAN-102, operated by YPF. Equinor's interests also extend to the Malvinas Oeste and Austral basins, with significant stakes in multiple licenses.

Argentina's government has been proactive in fostering offshore exploration, awarding 18 areas to nine company groups during the 2018-19 licensing round. This effort, intended to attract $724 million in investment, underscores the nation's belief in the offshore sector's potential, likening its geological formations to those in West Africa, where substantial discoveries have been made.

Despite the dry well, Argentina's offshore hydrocarbon potential remains vast. According to a YPF presentation, the country's offshore resources are estimated at 31 billion barrels of oil equivalent, compared to the 29 billion barrels in the onshore Vaca Muerta formation.

While the dry well is a setback, it also provides valuable data for future exploration, underscoring the ongoing commitment of companies like Equinor to unlocking Argentina's offshore energy potential.

By Julianne Geiger for Oilprice.com

More Top Reads From Oilprice.com:

• Russia Appears to Be Amassing a Dark Fleet to Ship LNG
• BP Freezes Hiring and Pauses New Offshore Wind Projects to Please Investors
• Novatek Proceeds With Arctic LNG 2 Despite New Sanctions on Russia