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The majority of oil companies with interests in Vaca Muerta agree on one point: it is necessary to increase the competitiveness of Argentina as a whole in order to facilitate the exploitation large scale formation of unconventional hydrocarbons. This vision is virtually unanimous. The improvement of infrastructure, fiscal adjustment, labor productivity and the expansion of petroleum service offerings are topics that are repeated in all forums and seminars which deal with the development of fields schist Basin Neuquén What is not clear, however, it is the economic impact of the disadvantages that the country still has. How to improve each of these weaknesses or aspects with the help of an economic unit? What is the economic effect, for example, of taxes levied on the import of products and spare parts used in shale development ? What is the impact of the tax burden established by the Nation and the Province of Neuquén?
It is not easy to find concrete answers to each of these questions. TRAMA Magazine accepted, in this sense, a report circulating among the oil companies that provide quantitative data in this regard. The document was developed in mid-2017 with information gathered until the first quarter of this year, so some figures may have lost their relevance to the regulatory changes registered since then, such as the signing of new rules. a new collective labor agreement for Neuquén's unconventional projects. Even so, the figures serve as a roadmap for identifying the aspects that need to be worked on to power the arrival of Vaca Muerta investments.
The report calculates that the verification fee becomes more expensive at $ 0, 20 per boe the operation at Vaca Muerta. While the gross income collection (IIBB) in Neuquén causes an increase of $ 0.30.
The development cost at Vaca Muerta round, according to statistics presented by YPF, the $ 12.50 per barrel of oil equivalent (boe). The state-controlled oil company is the one that has most advanced in the exploitation of fields shale (it has more than 500 wells drilled), so these figures can only be extrapolated to the rest of the companies. Most companies are still going through a much earlier phase. In turn, each oil company calculates different elements when calculating its development cost (for example, some include the costs of the facilities complementary and others not), so it is not practical to believe that there is a comparable figure for the whole of the industry. The number presented by YPF serves only as a reference. And also to compare how much Vaca Muerta is to look like to others plays . The study compares the cost of developing the Neuquén Basin Reservoir reservoir with that of the Permian, the most successful shale shale formation in the United States. after the collapse of the price of crude oil in June 2014. The document indicates that the Permian cost varies between 7 and 10 US dollars per developed boe. "In some parts of the room, today even lower because of technological improvements and processes incorporated last year," says the planning director of an oil company that spent the last two years to study the competitiveness of the two formations. The collection of import duties increases the cost up to $ 0.60 per barrel of oil developed at Vaca Muerta.
What to do with the state
The difference in the development cost of Vaca Muerta and the Permian Texas is explained for various reasons. The issues of well design (extension of the horizontal branch, number of fractures, well completion technologies) up to the rates of service companies affect the United States. they are lower due to greater competition, higher productivity and lower labor costs for employees. However, the document circulating among the oil companies badyzes in particular the impact of the tax burden in both cases. In this context, he warns that, because of the fiscal framework applied in Argentina, the cost of development at Vaca Muerta is US $ 2 per bee more expensive than the Permian. In practice, this means that if Argentina had the same tax burden as Texas, YPF would now cost about $ 10.50 to exploit a new barrel of oil at Vaca Muerta. And not $ 12.50 like now.
How does this figure break down? The report calculates that the check fee and other debit / credit taxes for the money cost $ 0.20 per boe operation at Vaca Muerta. While the Gross Income Collection (IIBB) in Neuquén, a tax in the United States is levied through another methodology, generates an increase of U $ S 0.30. And the collection of the stamp tax, also at the head of the province, leads to an additional cost increase of US $ 0.20.
The decisions of the Nation also have a negative impact on the competitiveness of Vaca Muerta. The collection of import duties – even after the flexibilisation of the 629 decree signed by President Mauricio Macri in August 2017 – raises the cost to US $ 0.60 per barrel of oil developed at Vaca Muerta. In other words, the price of equipment and supplies imported into Argentina ends up being much more expensive than the same products in Texas.
It also generates an additional cost surcharge fuel tax (former ITC) and the carbon dioxide tax created by the tax reform last December on diesel fuel consumed by the pumping equipment used to fracture hydraulically an unconventional well. While in the United States the tax burden on diesel is virtually non-existent, in the country it accounts for nearly $ 7 a liter. "Although it depends on the value of the exchange rate, the fuel tax eventually represents an additional cost of about US $ 0.30 for every barrel extracted at Vaca Muerta," says one of the sources consulted.
Assignment for all
If the weight of the tax burden on the competitiveness of Vaca Muerta is important, the impact of other elements such as the design of horizontal wells used in the country against those drilled in the Permian, the rates of drilling services companies and well completions and work efficiency.
The report to which he consented Magazine TRAMA argues that, as a result of a better design of the wells, the development of a barrel of crude oil in the Permian is up to 39, at $ 2.50 cheaper than at Vaca Muerta. Well drilling with up to 3500 meters of lateral branch and the realization of a greater number of fractures thanks to technology completion at high intensity (which shortens the distance between fractures ), among other variables, has reduced the cost of development in the Permian. This is why many of the oil companies operating in Neuquén incorporate this type of improvements in drilling design. Gustavo Astie, regional director of Unconventional YPF, said at a seminar organized by IAPG in Houston in mid-May, that the oil company is implementing improvements in the design of the wells to reach a development cost of 10 USD / boe. 2019.
The cost of services is also an important element. The drilling rate and beam of well fracturing are cheaper in Texas. This differential represents up to an additional US $ 2 per barrel of oil developed in the schist Neuquén Basin. While the drop in work efficiency recorded in Vaca Muerta explains an additional cost of up to US $ 0.90 per barrel. "It is likely that after the rider to the collective agreement that was put in place last year, this figure was partially reduced, but there is still a significant difference with the US performance "explained the relationship manager a service company. ×
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