April 2019 – @alvaroriosroca – In the previous issue of March 2019, we indicated that the Southern Cone natural gas market (Brazil, Bolivia, Argentina, Chile and Uruguay where there is interconnection and interdependence) was moving from a Sellers Market to a Buyers Market.
We revealed that this swap from Buyers Market to Sellers Market was due to three factors: very new recent and competitive offer of unconventional natural gas produced mainly in the prolific shale of Vaca Muerta in Argentina, the constant increase in natural gas production in Brazil (mainly in the Presal where gas is associated with oil) and new exploration in Bolivia that could have positive results between 2019 and 2020.
Finally, we pointed out that in mid-2017, and as a result of future investment analyzes that we had anticipated in Argentina, Brazil and Bolivia, one could predict that there would be excess supply of natural gas in the Southern Cone, as it is currently happening. See http://www.telam.com.ar/notas/201708/197388-superavit-gas-cono-sur.html
Deepening the analysis of Bolivia, we stated that several private companies in the country and also YPFB were carrying out exploratory and development drilling, the results of which we will see between 2019 and 2020, which could reverse the fall in reserves and production of natural gas, mainly to renew contracts with companies in Brazil.
Unfortunately, we have to recognize that the Boyui X2 well in the Caipipendi block has not resulted in a commercial discovery as desired, despite having reached the Huamampampa sand at 8000 meters deep and have produced some natural gas.
However, the Jaguar X1 well in Huacareta (Shell) continues in exploratory drilling, whose finding results should come out around mid-2019. Also Caranda Profundo CAR-X1005ST in Colpa-Caranda (Petrobras) should also shed some kind of result before year-end.
Ñancahuazu X1 in the Azero block (Total) is another very interesting prospect whose results will be seen around June 2020. There is also the Sipotindi X1 exploratory well in the Aguarague Norte Block (YPFB) and whose results will come out before the end of 2019. There are some other prospects to drill from YPF, YPFB, Petrobras that will come later.
Going into topic, We indicated that this 2019 would have the results of the Incahuasi X5 development well in the Ipati block and that it could increase reserves and production capacity and / or production horizon (plateau). See http://www.enernews.com/relacionada/5d2d216e6e53768dddf9bdea540a383f/escribe-alvaro-rios-roca-nueva-exploracion-en-bolivia-traera-mas-gas-competitivo-al-cono-sur
This prediction of the Incahuasi X5 well became a reality (this is what this industry is like, sometimes yes, most of the time no) and it will bring new reserves and production to Bolivia. This block that is operated by Total (50%) and where Gazprom (20%), Tecpetrol (20%) and YPFB Chaco (10%) are also partners will increase Bolivian reserves by about 0.4 trillion cubic feet (TCF) and a new production close to 3 Million Cubic Meters per day (MMCMD).
The Aquio Ipati block plant is increasing its capacity to process 11.5 million cubic meters per day (MMCMD) to process even the production that will leave the Incahuasi X3. In this context, the partners will have to evaluate if the production close to 3 MMCMD of the X5 will increase the production plateau of the block for some more time, or you see the possibility of doing some upgrade to the plant to increase capacity depending on market conditions.
We conclude by emphasizing that the sands of the fields in Bolivia have high productivity and in an area with enough developed infrastructure, everything indicates that the region will have gas in competition with gas-against-gas.
* Former Hydrocarbons Minister of Bolivia and Current Managing Partner of Gas Energy Latin America.