YPF sets date to spud large gas prospect in neighbouring Bolivia

Argentina’s state-controlled YPF is making plans to drill early next year a high-impact exploration well in Bolivia with potential to hold large volumes of natural gas.

Gas production in Bolivia has been declining at a steady pace for nearly a decade, and output is projected to drop more rapidly in the coming years if the country fails to make new discoveries to revert the trend.

YPF is set to invest $50 million in the drilling of the Charagua-X1 wildcat in the concession of the same name in the Cordillera province in the Santa Cruz department.

Bolivian state-owned energy player YPFB partners YPF in the area, which was acquired in July 2017 and carries a seven-year exploration period.

YPFB chief executive Armin Dorgathen Tapia estimates Charagua-X1 could hold 1.4 trillion cubic feet of gas in potential resources.

The campaign is earmarked to begin in the first quarter of 2024 to evaluate the hydrocarbons potential of the Icla and Santa Rosa formations.

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Charagua-X1 will be drilled to a final depth of about 5000 metres. It will be the first time that YPF and YPFB join forces to carry out an exploration programme in Bolivia.

YPF is presently in the process of trying to secure the environmental licence with Bolivian authorities to spud Charagua-X1 in early 2024.

Between 2019 and 2020, YPF acquired and processed 286.5 square kilometres of 3D seismic in the Charagua block in an attempt to reduce the geological uncertainties related to the drilling campaign.

Despite new investments to try to continue a relevant player in South America, gas production in Bolivia is expected to decline from 1.4 billion cubic feet per day in 2022 to as low as 400 million cubic feet per day by 2030, according to a report from Wood Mackenzie.

The consultancy added that by the end of the decade, domestic demand will likely outstrip supply, with Bolivia potentially becoming a gas importer.

Bolivia’s fiscal terms are among the least competitive in Latin America and the country has done little to attract capital from abroad for more exploration contracts.