Argentina’s local news outlet Rio Negro reported that the crisis in the oil industry has escalated to higher levels in the country. The state-owned oil company YPF closed in the last few hours 50% of the production of its main oil-producing developments in Vaca Muerta’s flagship, such as Loma Campana. The same measure was taken from other companies such as Vista Oil & Gas.
The measure is due to the abrupt drop in fuel demand that the country has registered. Argentina’s demand for gasoline plunged by 70% five days after the mandatory lockdown, adding that diesel demand had slumped by nearly 50%, and jet fuel demand had crashed by 90%.
This drop in fuel demand made the refineries fill their storage tanks first, then all the outside storage facilities. And finally, as the stockpiles of the reservoir tanks were filled up, producing wells had to be temporary closed.
This is what happened in Loma Campana, the main oil development in all of Vaca Muerta and from where YPF obtains more than 40,000 barrels per day, together with its partner the US super-major Chevron. Vista Oil & Gas led by ex-YPF CEO Miguel Galuccio had also to cut production in its Bajada del Palo Oeste block.
Rio Negro said “these forced production closings will seriously affect the already depleted royalties received by the province of Neuquén, which in February – the last month officially computed – had managed to reach the record of the last 14 years with a daily production of more than 166,000 barrels.”
(Source: Rio Negro)