Despite the significant potential for unconventional oil production, why is Central Resources focusing on mature fields in Argentina?

Although the rise of unconventional activities has increased their appeal, Central Resources believes that there are still opportunities in conventional fields. Our company’s focus remains on mature fields, and we have sold assets in Chubut Province to concentrate on fields in the Neuquén Basin, where other companies have not seen opportunities.

What kind of technology does Central implement to stimulate production from mature fields?

In terms of reservoir, our company continues to focus on primary recovery and secondary recovery. To carry out primary recovery, we fracture and acidize wells to stimulate production. Our goal is to control costs and increase the production potential of our wells. For example, we reduced costs in the El Sauce Field by installing new surface equipment, including long-range pumps.

How would you rate the availability of oilfield services for your operations?

The availability of oilfield services has not been a significant issue for our operations in Argentina. After the discovery of Vaca Muerta, the demand for fracturing and acidizing services increased so much that it was difficult for us to contract these services. However, the market has adjusted since 2015, and these services are no longer in short supply.

How have the prolonged contract negotiations for the extension of the company’s licenses in Río Negro delayed the company from investing in them?

We have been negotiating with Río Negro Province for the extension of our production licenses for the Catriel Oeste field for the past four years. Unfortunately, the negotiation process has been delayed due to three governors serving throughout this time, which has dampened oil and gas investments in the province. For example, we have drilled seven wells in Neuquén but only three in Río Negro. We are willing to invest in our two fields in Río Negro, but we are not sure whether our license will be extended, and we would not be able to recover our investment before our contract with the province expires. Furthermore, we are not the only company that has postponed investment in Río Negro fields.