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By Eliana Raszewski
BUENOS AIRES, March 11 (Reuters) - Argentina’s state-owned Enarsa has bought 950,000 barrels of crude oil to make up for a declining production levels in the southern Neuquen province, the president of Shell Argentina said on Wednesday.
Juan Jose Aranguren said the shipment would land in early April and be distributed to refineries owned by the state-run energy company YPF, Petrobras Argentina, Shell and Axion.
Domestic production has dropped steadily over the past decade from a peak of 855,000 barrels per day (bpd) in 1998 to the current 550,000 bpd level, a trend Aranguren blamed on weak investments due to low profits in Argentina’s energy sector. The government of leftist President Cristina Fernandez sets the price paid for locally produced oil.
“In the first week of April, a shipment of Nigerian crude needed to offset the diminishing supply of crude from the Neuquen Basin will arrive,” Aranguren told reporters at the launch of a new gas station in the outskirts of Buenos Aires.
“The industry reached an agreement to import a large shipment of crude, in this case 950,000 barrels ... and distribute that at a ratio of what each refinery can absorb,” Aranguren told reporters.
Energy giants Chevron Corp, Petronas and Shell have made foothold investments in Argentina’s energy industry, but heavy-handed state controls have kept them from fully committing.
Production maintained its downward trend in 2014, falling 1.4 percent as a slump in private production outweighed gains by YPF. It sank another 1.1 percent in January compared with a year earlier.
Aranguren said Enarsa paid $61-$62 per barrel for the Nigerian oil, which traders said on Tuesday was Forcados crude light. The refineries will pay $75 per barrel, slightly below the price set by the government for domestically produced crude.
Argentina is running an energy deficit of more than $6 billion per year, which the government wants to close by attracting investment to the vast but mostly untapped Vaca Muerta Shale oil and gas field in Patagonia.
Shell resumed its search for oil and gas in Argentina in 2012 after a decade-long hiatus during which it only refined crude, investing in Vaca Muerta acreage.
Aranguren said Argentina’s crude output had slumped because “there was no profitability for producers, so they didn’t invest to main production levels.”
Argentina lifted restrictions on crude imports in January 2014. (Writing by Richard Lough; Editing by Chizu Nomiyama and Cynthia Osterman)