MercoPress. South Atlantic News Agency

Repsol-YPF makes major oil discovery in Neuquen basin

Spain’s Repsol YPF confirmed in Buenos Aires local media reports that it has hit oil in Argentina's Neuquen province, but the potential from the well has still not been technically certified, a company spokesman said.

”There's a well ... that's been producing for six months, initially generating 200 cubic metres per day (1.258 bpd), but I don't have the latest information,“ a Repsol-YPF spokesperson confirmed. However the company was cautious, “before giving out information we're trying to certify it with technicians”.

He added that accumulated flows since March from the La Caverna x-1 well totalled 11,000 cubic metres (69,185 barrels). “That's a significant number. A useful well in that zone can produce 70,000 cubic metres over a 40-year lifetime,” he said.

The YPF spokesman also confirmed a report published by Argentina's DyN news agency that La Caverna x-1 is in the Quintuco formation in the Bandurria exploration area in the Neuquen basin.

DyN said the operations in the Bandurria exploration area are 54.54% owned by YPF, with Germany's Wintershall holding 27.27% and Pan American Energy holding 18.18%.

Buenos Aires Clarin daily which broke the news quoted Neuquen province's Governor Jorge Sapag as saying that the company “has found oil and is working in the zone”.

According to Neuquen officials it could be the largest discovery in the province since 1992.

Clarin cited unnamed YPF sources who said that the potential in the exploration block where the well is located could be 90 million barrels per year. The newspaper said that was equivalent to Argentina's total current oil output. Governor Sapag said that Neuquén supplies 50% of Argentina’s energy.

YPF produces about two-thirds of Repsol’s total oil output. YPF said last November 26 it had boosted its oil reserves by 309 million barrels in the last three years and could add as many as another 500 million barrels from so-called contingent reserves. These are resources that will become “reserves when certain investment and market conditions are fulfilled,” Repsol said, without being more specific on the conditions.

In related news Repsol may sell 20 to 25% of YPF through a public offering, Chief Operating Officer Migule Martínez said on November 29. The company is investing in exploration in Brazil’s Santos Basin and regions outside Argentina to stem declining output.

In 2008, Repsol sold a 15% stake in YPF to Argentine banker Enrique Eskenazi for 2.2 billion USD. Eskenazi has an option to buy an additional 10% Last July Repsol said it had been approached by companies interested in buying YPF stakes. But none of the offers were “firm,” said Repsol. Apparently Chinese companies were involved in the exploratory operation.