Repsol YPF to bring forward investments in Argentina to have larger reserves and increase production

Press Release 23/06/2006 07:00

Repsol YPF will bring forward investments in Argentina under a $6 billion (EUR4.77 billion) three-year schedule for 2007/2009.
$4.6 billion (EUR3.658 billion) will be allotted to the exploration and production of oil and gas in that country.
The schedule for advancing investment in Argentina is based on a deeper knowledge of the fields acquired over the past year.
Repsol YPF will strengthen technical and strategic joint ventures with other companies given the growing interest in Argentina on the part of operators specialised in the exploration of mature regions.
New reserves will be generated by intensifying exploration activity and through additional development with the application of improved operating methods and new technologies in mature areas.
Deepwater operations will increase in association with ENARSA, such as in the Gulf of San Jorge. The viability of the Tight Gas project will be developed to obtain commercial gas from low permeability structures.
The investment schedule in Argentina will make it possible to project additional investment after the 2007/2009 period, and allows the company to define future options for incorporating production and reserves beyond the year 2010.

The investment schedule presented today by Antonio Brufau, Executive Chairman of Repsol YPF, to Nestor Kirchner, President of Argentina, currently on an official visit to Spain, contemplates a total investment for Argentina of $6 billion (EUR4.77 billion) during the three-year period of 2007 to 2009, of which $4.6 billion (EUR3.658 billion) is earmarked for the area of Exploration & Production, and the remaining $1.4 billion (EUR1.113 billion) will be allotted to the Refining & Marketing and Chemical areas.

One of the specific programmes to benefit under this schedule will be the expansion of deepwater offshore exploration, in association with Enarsa, and for which a latest generation platform has been contracted. In addition, new techniques based on the best international practices will be applied to improve recovery at mature fields, with the emphasis on knowledge of the subsoil obtained through technologies for field typification, including the acquisition of additional 3D seismic.

At the same time, operations in heavy and other types of crude oil will be developed in the Neuquen basin and Santa Cruz, and advanced-technology pilot projects for tertiary recovery and the injection of chemicals will be speeded up. Finally, plans for secondary recovery will be revitalised in line with the successful experience accumulated at similar fields.

As part of this program, investments will be made in a pilot project to determine the viability of the first Tight Gas project in Argentina. This type of operation for the non-conventional extraction of gas has produced excellent results in countries with mature oil basins, such as the USA where 40% of the gas in that country is produced using this new technology.

Tight Gas basically consists in obtaining gas from gaseous sands with very low permeability. Sophisticated study techniques, and thanks to a deeper knowledge of the fields, it is possible to determine the viability of applying this new technology, which requires wells to be drilled via non-conventional methods.

In the Refining & Marketing and Chemical areas, refineries will be re-equipped for the processing of heavy crudes and to increase the production of gas-oil; there will be investment in improving fuel quality; for revamping petrochemical production units, and for the development of biodiesel projects.