E&P companies in Neuquén to invest up to US$6bn in 2014

Oil and gas companies are expected to invest between US$5bn and US$6bn in 2014 in the Argentine province of Neuquén, according to local press, citing a report by the provincial government. The forecasted investment for next year represents a significant increase from the US$4.1bn invested in Neuquén E&P in 2013.

Unconventional plays will receive the majority of the capital influx, with the Vaca Muerta shale play taking approximately 60% of the total. Of the 635 wells to be drilled next year, 323 will target shale and tight sand deposits as opposed to 195 of the 471 wells drilled in 2013. Topping the list, national oil company YPF's (NYSE: YPF) investment in the province is expected to reach US$3bn. YPF will destine the funds primarily to its Loma La Lata shale, and its El Orejano and Rincón del Mangrullo tight gas pilot projects with Chevron (NYSE: CVX), Dow Chemical (NYSE: DOW) and Pampa Energía​ (NYSE: PAM) respectively.

While other firms focus on exploration, France's Total (NYSE: TOT) will be the only one, apart from YPF, working on an unconventional pilot project in the province. Called Aguada Pichana, Total is expected to invest US$380mn on the 20-well Vaca Muerta pilot. ExxonMobil (NYSE: XOM) plans to invest approximately US$250mn, according to the reports, followed by US$185mn from Pan American Energy, who will focus on exploration of the Lindero Atravesado formation.

Petrobras (NYSE: PBR) will invest US$113mn, primarily on its Río Neuquén and El Mangrullo areas. O&G Developments, a subsidiary of Shell (NYSE: RDS.A) in Argentina, will invest at least US$90mn (max US$500mn) on its Sierras Blancas license. Meanwhile, Wintershall is rumored to have signed a definitive partnership with provincial oil company GyP to drill a dozen wells on the Aguada Federal block.