In a country emerging as a large oil and gas producer, there is undoubtedly a need for energy. In the case of Argentina, there is no difference. The country’s shale plays have tremendous potential for companies to expand, businesses to start-up, and for investors to prosper. At Worldwide Power Products, as a company, we are excited to be increasing our involvement in Latin American counties such as Argentina. We will provide diesel generators, engines, and many other types of power products to aid companies in tapping the shale plays scattered throughout Argentina’s basins.
In some ways you could say we are looking to fulfill Argentina’s demand for energy, and while we may only play a small role in that fulfillment, the large growth in population will definitely require further power generation to the region. In addition, major petroleum companies are expanding, resulting in a virtual explosion of oil drilling throughout the country, also requiring more readily available energy.
Undoubtedly, the U.S. has had its fair share of recent shale plays, but Argentina is also becoming a noteworthy member of the shale community. So noteworthy in fact, Argentina has found itself third on a list — compiled by the U.S. Energy Information Administration — of countries with the most shale gas potential, behind only the U.S. and China. More specifically, the vast majority of shale oil reserves sit under the Neuquén Basin, which is located in Western Argentina, spanning much of the Rio Negro, La Pampa, and Mendoza provinces. Thus far, upwards of nearly 150 million barrels of oil and significant amounts of gas have been found leading a large number of people in the industry flocking to the area.
With such big oil potential in Argentina, it only makes sense that the various shale plays will need back up power generation. There could be all the oil in the world sitting in Argentina, but with no power to tap into it, there really is no point. This is where Worldwide Power Products comes in — providing natural gas generators and other essential power products to companies in the area.
Additionally, the country’s Ministry of Federal Planning has vamped up its enticement of foreign companies to tap into shale plays in Argentina. While some companies, such as Repsol, out of Spain, have been met with some government intervention, a lot still remains to be seen on how the government will react to the sudden shale boom in the country. There definitely seems to be mixed signals coming out of the Argentine government, with one cabinet member calling for the nationalization of YPF, one of the country’s largest oil and gas companies, thus potentially dramatically increasing the governments involvement with the country’s oil and gas production. It is uncertain weather this will actually happen or if it is merely an idea that will fail to find fruition with little or no resistance to drilling activities.
For private investors, the best way to get in on Argentina’s shale action is to put your money in a company like Apache. In just the last six or seven years, the company has transformed into one of the major oil and gas companies in the country. In fact, it is currently the fifth largest with involvement in over 30 oil fields spanning nearly four million Argentine acres and four of the country’s basins.
Just as remote areas of the U.S. have recently seen a boom in shale drilling, similar desolate areas of Argentina have been experiencing a similar boom. Oil and gas companies have been setting up shop in all the major shale basins throughout the country and private investors have been jockeying to invest in companies faced with the least amount of government resistance. Undoubtedly, it will be fun to see how the region develops, but I guess we will just have to wait and see how it all plays out.