HOUSTON, March 6 (Reuters) - Argentina’s state-run oil company YPF has cut horizontal drilling costs by more than half and slashed the time required to complete new wells, the chairman said on Monday at the CERAWeek energy conference.
The company cut the cost of horizontal drilling to around $8 million from $17 million a well, while the time required to complete a new well has been shaved to 15 days from 40 days, Miguel Gutierrez told the gathering in Houston.
Those efficiencies have pushed break-even prices to below $40 per barrel, a significant gain for Argentina, which has struggled to attract capital since crude prices started to decline in 2014.
Argentina recently has been pushing again to lure energy investment into the country, particularly into its massive Vaca Muerta formation. That reservoir is one of the largest shale deposits in the world.
In January, Argentina announced changes to its subsidy program to offer producers $7.5 per million BTU of natural gas produced through 2020 - a figure well above U.S. gas prices.
“It’s competitive, especially compared to the United States,” Gutierrez said on the sidelines of the conference.
Despite the vast reserves, lack of production has left the country short on energy, and a bump in production is unlikely to curb imports in the near term. In 2016, Argentina was forced to significantly increase imports of LNG and purchase supplies from Chile, which resells a portion of the gas it receives to its neighbor.
“For quite a considerable time, Argentina will be importing LNG,” Gutierrez added.
Argentina also is exploring opportunities for deep-water offshore oil production. A process is underway to explore a new area, with work anticipated to begin in April, Gutierrez said. (Reporting by Liz Hampton and Marianna Parraga; Editing by Gary McWilliams and Mary Milliken)