MercoPress. South Atlantic News Agency

Oil discovery to double Argentine Patagonia production

Argentina's Patagonian hydrocarbons rich province of Chubut announced this week the discovery of new oil deposits that will help double the province's production, anticipated Governor Mario Das Neves.

Pan American Energy, a consortium of Argentina's Bridas group (40%) and British Petroleum (60%) made the discovery and will officially give details of the new deposits to Argentine president Cristina Fernandez de Kirchner. The three new succefull wells drilled 110 kilometers west of Comodoro Rivadavia at a depth of 2.100 meters in the Escalante basin, --an extensión of the San Jorge Gula basin--, will enable Chubut to expand its annual production "to the range of 100 million barrels annually, doubling the province's current extraction of 50 million barrels". Chubut province holds 41% of Argentina's proven reserves. Chubut has 5.081 active wells of which 300 have been drilled in the last twelve months. According to Chubut provincial authorities Pan American has plans to invest over a billion US dollars in new exploration and drilling this year of which 75% in the Patagonian province. Chubut was the first Argentine province to renegotiate oil and gas contracts with the industry. Pan American which has a long experience in Chubut has had its licence extended until 2027 and will have to invest a minimum of 778 million US dollars in the next ten years out of a total of 2 billion until the end of the contract. Royalties will increase 15% and the company is committed to invest 120 million US dollars in infrastructure and increase production annually 9% until 2017. Pan American currently holds 54% of Chubut oil and gas licences. Oil taxes are Chubut's main source of income.