| HOUSTON, March 6
HOUSTON, March 6 Argentina's state-run oil
company YPF has cut horizontal drilling costs by more
than half and slashed the time required to complete new wells,
the chairman said on Monday at the CERAWeek energy conference.
The company cut the cost of horizontal drilling to around $8
million from $17 million a well, while the time required to
complete a new well has been shaved to 15 days from 40 days,
Miguel Gutierrez told the gathering in Houston.
Those efficiencies have pushed break-even prices to below
$40 per barrel, a significant gain for Argentina, which has
struggled to attract capital since crude prices started to
decline in 2014.
Argentina recently has been pushing again to lure energy
investment into the country, particularly into its massive Vaca
Muerta formation. That reservoir is one of the largest shale
deposits in the world.
In January, Argentina announced changes to its subsidy
program to offer producers $7.5 per million BTU of natural gas
produced through 2020 - a figure well above U.S. gas prices.
"It's competitive, especially compared to the United
States," Gutierrez said on the sidelines of the conference.
Despite the vast reserves, lack of production has left the
country short on energy, and a bump in production is unlikely to
curb imports in the near term. In 2016, Argentina was forced to
significantly increase imports of LNG and purchase supplies from
Chile, which resells a portion of the gas it receives to its
"For quite a considerable time, Argentina will be importing
LNG," Gutierrez added.
Argentina also is exploring opportunities for deep-water
offshore oil production. A process is underway to explore a new
area, with work anticipated to begin in April, Gutierrez said.
(Reporting by Liz Hampton and Marianna Parraga; Editing by Gary
McWilliams and Mary Milliken)