Changes

==Conditions for Economic Success==

==Conditions for Economic Success==

The Vaca Muerta play has continued to progress lowering the breakeven to US$40/bbl for oil and US$2.0 MMBtu for wet gas. As activity ramps up these values will continue to fall, placing the Vaca Muerta play squarely on its way to be a disrupter in Argentina’s O&G industry, the economy of Argentina and of the Southern Cone. The operators in the development phase believe that the combination of costs, well performance, and product prices are earning a return in their investments. In other words, the combination of below ground factors (geology) and above ground factors (e.g., contract terms, regulations, supply chain, security, market access) are allowing the development to be profitable. Although several other organic-rich formations around the world (in China, Australia, Russia, Saudi Arabia, Oman, Mexico, Indonesia) may have comparable potential to the Vaca Muerta play, the presence of several critical factors has allowed the latter to become the first competitive unconventional self-sourced play outside of North America (see [[:file:M125-VacaMuerta-Table1.jpeg|Table 1]]).

The Vaca Muerta play has continued to progress lowering the breakeven to US$40/bbl for oil and US$2.0 MMBtu for wet gas. As activity ramps up these values will continue to fall, placing the Vaca Muerta play squarely on its way to be a disrupter in Argentina’s O&G industry, the economy of Argentina and of the Southern Cone. The operators in the development phase believe that the combination of costs, well performance, and product prices are earning a return in their investments. In other words, the combination of below ground factors (geology) and above ground factors (e.g., contract terms, regulations, supply chain, security, market access) are allowing the development to be profitable. Although several other organic-rich formations around the world (in China, Australia, Russia, Saudi Arabia, Oman, Mexico, Indonesia) may have comparable potential to the Vaca Muerta play, the presence of several critical factors has allowed the latter to become the first competitive unconventional self-sourced play outside of North America (see [[:file:M125-VacaMuerta-Table1.jpeg|Table 1]]).

[[file:M125-VacaMuerta-Table1.jpeg|center|framed|’’Table 1.’’ Conditions for Economic Success. Main Critical Factors That Allowed the Vaca Muerta to Become the First Competitive Unconventional Self-Sourced Play Outside of North America.]]

 

[[file:M125-VacaMuerta-Table1.jpeg|center|framed|'''Table 1.''' Conditions for Economic Success. Main Critical Factors That Allowed the Vaca Muerta to Become the First Competitive Unconventional Self-Sourced Play Outside of North America.]]

Repsol-YPF fractured the initial Vaca Muerta vertical wells in 2010, hence it has taken the O&G industry some 10 years and 1000 wells, to prove the play’s competitiveness with North American resources. And it has taken 3–7 years for major O&G companies to become confident enough in its commerciality, to sanction large developments. With time, willingness to invest and good geology, the Unconventional Revolution will not remain a North American story and Vaca Muerta will be just the first example of economically successful unconventional development, among other petroleum-rich provinces endowed with infrastructure (known as [[Super Basin]]s).

Repsol-YPF fractured the initial Vaca Muerta vertical wells in 2010, hence it has taken the O&G industry some 10 years and 1000 wells, to prove the play’s competitiveness with North American resources. And it has taken 3–7 years for major O&G companies to become confident enough in its commerciality, to sanction large developments. With time, willingness to invest and good geology, the Unconventional Revolution will not remain a North American story and Vaca Muerta will be just the first example of economically successful unconventional development, among other petroleum-rich provinces endowed with infrastructure (known as [[Super Basin]]s).