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Argentina at odds to end shale, refinery blockades
4/27/2021 12:00:00 AM

Oil and gas producers in Argentina are warning that persistent roadblocks will keep them from meeting their supply commitments and force the country to spend millions more on imports.

The roadblocks, spearheaded on 7 April by healthcare workers seeking higher pay, prevent access to the Vaca Muerta shale formation in Neuquen province.
The blockades have cut production by 3.5mn m3/d of natural gas and around 10,000 b/d of crude, according to estimates by workers of an oil company operating in the area. The shortfall in gas production is 1.5mn m3/d higher than what was estimated mid-last week, while the amount of crude lost has doubled, illustrating how quickly the situation is developing.
Sector companies have warned production losses will balloon if the protests persist.
Overall, 70 rigs, including drilling and fracturing equipment, cannot operate, up from 45 last week, according to an industry source. Some companies are relying on helicopters to get workers in and out of the blocks and are also using alternative routes that can add hours to the trip.
In a letter to provincial and national officials last week, hydrocarbons chamber CEPH said Argentina will have to spend more than $200mn more on imports to make up for lost production, a figure that rises by $13mn for each day the protests continue. And production will take time to bounce back. "The lost production will take months to recover due to the lack of availability of the equipment required to fracture wells in the domestic market," the chamber said.
Dry pumps
Some 80 retail stations in the area are short of fuel, in part because of blockades thwarting distribution from Argentinian state-controlled YPF's 25,000 b/d Plaza Huincul refinery.
The state healthcare workers have rejected the government's weekend offer of a 53pc salary increase, because it would be made in installments through March 2022. Negotiations have since resumed.
"If we have to be on the front lines of this pandemic, we don't want to worry about whether we can make it to the end of the month, whether we can pay rent," said Marco Campo, an employee at the Dr. Castro Rendon hospital in Neuquen who represents the protesters.
Source: Argus
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