Fracking activity in Argentina's Vaca Muerta surges in November

Buenos Aires — Fracking activity in Vaca Muerta shot up 58% month on month in November, reaching the highest level this year, according to data released Dec. 1, as Mexico's Vista Oil & Gas and Argentina's state-backed YPF stepped up their investment in Argentina's biggest shale play.

The number of frac stages in the play rose to 545 in November from 345 in October, and was in line with the activity in November 2019, according to data compiled by the Argentine unit of NCS Multistage.

YPF, the country's biggest oil producer and No. 2 for natural gas, was the most active with 232 stages, trailed by Vista with 196, Pluspetrol with 71 and Tecpetrol with 46.

The rise comes after an almost complete lifting of economic lockdowns aimed at slowing the pandemic helped revive oil and gas demand.

The lockdown, which ran March 20 to Nov. 8, had depressed local demand, prompting operators to cut back to as little as zero frack stages in April. Since then, demand has gradually recovered, helping to increase oil production to 474,085 b/d in October after bottoming out at 445,614 b/d in May, according to the latest data from the Energy Secretariat. Gas production recovered to 121.9 million cu m/d in October from a pandemic-low 116.7 million cu m/d in April.

November marked the fourth month-on-month rise in fracking activity, a sign that companies are starting to invest again in Vaca Muerta, one of the world's largest shale plays. A rise in global oil prices from a low in April has also encouraged new activity in the play, as has the announcement of a new program in Argentina to improve returns on gas production with higher pricing and long-term supply contracts.

Despite the growth in activity, oil production is still shy of the pre-pandemic level of nearly 520,000 b/d in March, and gas is less than the most-recent high of 144.4 million cu m/d in July 2019.