Trafigura and Vista in $250MM Vaca Muerta Deal

Trafigura Argentina and Vista Oil & Gas have announced the signing of a joint investment agreement for the development of 20 oil wells in the Bajada del Palo Oeste block.

The joint investment of approximately $250 million represents an important capital investment in Vaca Muerta Shale, according to Trafigura, which described Vaca Muerta as one of the most important shale formations globally.

Under the deal, Trafigura will invest around $75 million, $25 million of which is a purchase price for a 20 percent participation in the production of the wells covered by the agreement. Vista, which will be the operator of the wells, will keep 80 percent of the production from the wells and contribute 80 percent of the investment.

“This alliance allows us to strengthen our business in Argentina and integrate the supply of crude oil for our refinery and the subsequent supply of fuels for our network of service stations, wholesale clients, and the export market to neighboring countries,” Martin Urdapilleta, the general manager of Trafigura Argentina, said in a company statement.

“Our strategic agreement with Vista will contribute to the development of Vaca Muerta, continuing its operational excellence and compliance with the highest safety and environmental standards. This initiative is part of our ambitious investment plan for Argentina that began in 2013 and that we plan to continue executing during the following years, showing our long-term commitment to the country,” he added.

Miguel Galuccio, the president and CEO of Vista, said, “this agreement further validates the performance of our company and the excellence of its management team, which has allowed us to lead the development in Vaca Muerta and to be the partner of choice of a global company for the development of shale in Argentina, with safe, efficient and sustainable operations”.

“It will also help to generate more production, and thus continue to expand energy exports that are essential for generating foreign exchange that the country needs, whilst preserving and always supplying the local market,” he added.

Trafigura is one of the world’s leading independent commodity trading companies, trading over six million barrels of oil per day. In Argentina, the company owns and operates the Bahía Blanca Refinery, the Campana terminal, and Puma Energy’s network of more than 350 service stations and 50 agroservices.

Vista is the third largest crude producer in Argentina and the second largest shale oil operator in the country. It has operated the Bajada del Palo Oeste block for over two years and its latest deal with Trafigura marks the first strategic agreement that Vista has made with another company to accelerate the development of its main shale oil block, which has 28 wells currently in production.

Argentina’s Vaca Muerta formation reached a record high oil production of 124,000 barrels per day (bpd) in December in 2020, a Rystad Energy report revealed earlier this year. In the report, Rystad outlined that if activity levels continued as they were, the reserve’s oil output could climb towards the 145,000 bpd – 150,000 bpd range by the end of the year.

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