Argentina received bids from 16 companies in a path-breaking auction to supply more than 70mn m3/d of natural gas at subsidized wellhead prices for power generation in 2021-24.
The bids ranged from $2.40/mn Btu to $3.66/mn Btu, coming in below the maximum price of $3.70/mn Btu.
Bids were presented by all of Argentina's main gas producers, including Argentina's state-controlled YPF, France's Total and Shell as well as domestic independents Tecpetrol, Pluspetrol and Pampa Energia.
"We are very happy because we received 16 bids, in absolutely all the basins with gas potential," energy secretary Dario Martinez said.
The government will analyze the bids starting tomorrow and awards will be issued on 15 December.
The bids were all higher than the current average wellhead price of around $2.3/mn Btu. The difference between the market price and the price awarded at auction will be paid by the government.
The administration of President Alberto Fernandez and industry participants are optimistic that the program will help reverse a decline in gas production this year, allowing Argentina to reduce costly imports of LNG and pipeline supply from neighboring Bolivia.
The gas subsidy plan "will allow us to restart our strategy of gas development in Vaca Muerta," Pablo Iuliano, YPF's vice president for unconventional upstream, said at an online seminar today, referring to Argentina's star shale formation centered in Neuquen province.
Rodolfo Freyre, vice-president of gas, electricity and commercial development of Pan American Energy, a 50:50 joint venture between BP and Bridas, said that today's auction was "just the beginning" and could give way to further auctions while helping develop new gas-focused projects in southern Argentina.
Argentina's gas production declined by 8.4pc in January-October, on the year, to 125.3mn m3/d.
This article is reproduced at www.argusmedia.com
