BUENOS AIRES, March 6 Argentina's shale oil
output from the vast but barely tapped Vaca Muerta formation has
edged up to 50,000 barrels per day equivalent, the CEO of
state-controlled energy company YPF told the La
In an interview published on Sunday, Chief Executive Miguel
Galuccio said that profit on YPF's shale oil and gas production
was "marginal" even with the price of locally produced crude set
artificially high by the government.
However, in a clear acknowledgement that the global oil
slump is affecting exploration of one of the world's largest
shale resources, YPF said on Friday that it will cut capital
expenditure in 2016 and put rigs in standby mode.
Galuccio told La Nacion that profit margins could improve as
the company, which produces most of its shale in a joint venture
with U.S. oil company Chevron, reduces exploration
The executive said that the company had cut the cost of
drilling each horizontal well to $13 million from $16 million,
and expects this to drop to $10 million by the end of the year.
"If we increase the productivity of these wells and drive
costs down, the economic equation changes," Galuccio told La
A year ago, YPF was producing about 44,000 barrels per day
equivalent from shale wells.
The South American country wants to ramp up its exploitation
of Vaca Muerta, which covers an area the size of Belgium under
the windswept plains of Patagonia, to reverse an energy deficit.
YPF has said that reversing the country's energy deficit
will require $200 billion in investment over the next decade,
largely on Vaca Muerta.
(Reporting by Richard Lough; Editing by David Goodman)