ExxonMobil launches tender to build oil pipeline in Argentina to boost Vaca Muerta output

ExxonMobil has launched a tender for a $75 million project to build a pipeline in Argentina, as the US-based company seeks to increase oil production in the Vaca Muerta shale play, a company spokesman said Nov. 8.

The winner of the tender will design and build the Bajo del Choique Nordeste pipeline with between 8,000 b/d and 12,000 b/d of capacity, with the possibility of increasing capacity to up to 60,000 b/d, the spokesman said.

The line will run for 43 km from Bajo del Choique-La Invernada, the company's biggest development in Vaca Muerta, to a connection with a backbone system for moving crude to the Atlantic.

ExxonMobil is taking the bids until the end of November with the goal of building the pipeline in the first half of 2024 so that it can start moving supplies by the end of that year, the spokesman said.

The goal behind the project is to use the pipeline instead of trucks to move crude out of the block, setting the company up to grow production, the spokesman added.

Bajo del Choique is producing some 7,600 b/d, according to data from the Argentina Oil and Gas Institute, an industry group. ExxonMobil operates three other blocks in the same area for the new planned pipeline's origin point, yet with little production so far seen from those blocks.

ExxonMobil announced plans in 2019 to drill 90 wells to increase shale oil and gas production to 55,000 b/d of oil equivalent in Bajo del Choique-La Invernada by 2024. At the time, the company said that if the development is successful, it could take production to 75,000 boe/d in a second phase.

Vaca Muerta is driving Argentina's oil production growth. The government of Neuquén, home to most of the in-production fields in the play, has forecast that the province's production could reach 400,000 b/d early next year -- up from 308,000 b/d at the end of 2022 -- before climbing to 1 million b/d by 2027 or 2028.