Despite previous comments that there was no commercial oil available in Paraguay's soil, President Energy is to drill its third well in the Chaco region, it was announced Thursday.
We did not find any commercial oil in the Chaco region, Atome Energy and former President Energy CEO Peter Levine had said during his participation in the Invest in Paraguay international forum, organized by the Government with the cooperation of the Inter-American Development Bank (IDB).
On that occasion, Atome Energy bought 30 hectares of land in Villeta, adjacent to the ANDE's Buey Rodeo substation, for the installation of its green hydrogen plant, which will require up to 400 MW of power.
I am an oil and gas engineer. We tried to find oil in Paraguay and people were right, we did not find commercial oil. We are still trying with other campaigns, Levine said on Sept. 8 after recalling that the first time he went to Paraguay was in 2014.
Frenchman Bernard Verdu, vice-president of Riviera S.A., a company that will drill its first exploration well in Chaco this year, recalled that in 2014 President Energy had announced that more than 1 billion barrels of oil had been located in the Pirity basin, with prospects of resources in those areas amounting to 1,093 million barrels. Verdu underlined that President Energy's shares rose 8.2% on the London Stock Exchange following that announcement.
However, at the end of the two drillings carried out by this company, President Energy published that ”the well confirmed that a very well developed reservoir quality sand is present (high average porosity 20% and 90 meters thick), however, the Carboniferous sandstone (Tupambi formation) was not sealed at this location and the hydrocarbons have migrated in the air.
Riviera S.A. will start a drilling campaign in the Carandayty Basin before the end of 2022 and during 2023 will produce the first barrels of oil, initially in small quantities, Verdu explained. He added that with an intensive drilling program, that is to say, several exploratory and development wells, plus 3D seismic studies, they will be able to recover their investments and generate profits.
However, Verdu detailed that in the north of La Patria, they plan to drill two wells, very close to the border with Bolivia, called Karina and Emilia Este, there will be 17 km of distance between one and the other. Drilling in that area is not very deep for oil, it is at 1500 meters. Further down, at 2500 - 3000 meters there is gas. They are two very different things, he said.
According to the calculations they made, they can extract in the next 20 years a minimum of 150 million barrels of oil, and that could be 500 thousand barrels already next year, with two wells. Then we must do two or three more wells, in 2024, and with development wells, in five years we can produce between 5,000 and 10,000 barrels/day. And before 10 years, we can reach 20,000 to 30,000 barrels/day, he said. But for this, they must invest between US$ 500 million and US$ 800 million. But from 2025 we can recover the investment, he said. He added that if they extract 150 million barrels of oil, in 20 years, at a price of US$ 100 a barrel, they will obtain US$ 15 billion, with profits of approximately US$ 9 billion, subtracting all investments and taxes.
Paraguayan officials agreed with the Englishman Levine: No well to this day is commercially exploitable as far as oil is concerned,” said Carlos Sánchez, director of Hydrocarbons at the Vice Ministry of Mines and Energy of the Ministry of Public Works.
Sánchez mentioned that up to now, all the wells that were drilled (52 in total) gave indications of oil and gas and that only the Cano Martinez well was the one that commercially exploited gas, in Gabino Mendoza. Regarding Riviera S.A., Sánchez insisted that it is in the exploration stage and that the law requires it to drill at least one well, but so far none has been drilled.