(Bloomberg) – Oil-drilling activity in Argentina’s Vaca Muerta shale patch is set to weaken in the near term as companies restrain spending, said the chief executive officer of the region’s biggest crude producer YPF SA.
“We might have to pull out a couple of fracing crews,” CEO Horacio Marin said during an event in Buenos Aires on Tuesday, “which is basically because of the slowdown we are seeing from international partners.”
Marin cited flagging oil prices and acquisitions by rivals that have consumed capital for the slowdown, and said the active drilling fleet in the Vaca Muerta could shrink by five or six rigs. There were 38 rigs drilling in Argentina as of July 31, targeting both crude and natural gas, a decline of 16% from a year earlier, according to Baker Hughes Co.
Marin’s remarks come as growth in the U.S. shale industry — whose 2010s-era boom Argentina seeks to mimic — slows amid swelling OPEC+ output and a cloudy demand outlook that’s pressuring crude prices. Still, Marin said that in the long term the Vaca Muerta, where drillers are trying to more than double daily crude production within a few years to 1 million barrels, would prove a success.
“Personally, I think the Vaca Muerta is unstoppable,” he said
