the data that explains the competitiveness gap with Permian

The big difference is in the level of development and volume of activity that the Texan formation has, a pioneer in the shale business, and where the technology that was applied in Neuquén to revitalize the local oil industry came from.

In the Permian there are more than 400 active drilling platforms, compared to the 38 equipment that Argentina has, and more than 40 billion dollars are invested a year, versus the almost 10 billion dollars that would be disbursed this year in Neuquén, a record figure for the domestic sector.

The efficiency of operations presents abysmal differences. A well is drilled in just 5 days in the United States, while in Vaca Muerta it takes between 20 and 30 days. Additionally, each pad in the Permian has 6 or more wells compared to the 4 per location in the Añelo area.

Team efficiency in Permian vs Vaca Muerta

In the completion stage, Vaca Muerta’s productivity is 40% below, with 6 daily invoices versus 10. Of course, the Permian has a much larger offer of special services, with more than 100 active teams, versus the 10 fracture sets that operate in the Neuquén subsoil, where the market is concentrated in about 5 companies. .

Drilling and completion equipment in the United States is much more technologically advanced, more efficient, and requires lower costs by being gas-powered or electrified. In Neuquén, progress in this regard is less. This year Vista electrified a drilling rig, and last year gas pumps from the company Eco2Power began to be tested on a fracturing set.

The history of development and the volume of activity of the largest unconventional play on the planet is even more evident when comparing the production levels. Permian contributes almost 6.2 million barrels of oil per day, 16 times more than the 390 thousand barrels per day produced by Neuquén, which today is at the highest mark in its history.

Vaca Muerta has better wells

Despite the most unfavorable scenario, with a market on an infinitely much smaller scale, Vaca Muerta concentrates several of the most prolific wells in the world. In the industry there is consensus that the benefits of Neuquén geology have allowed build wells 25 to 30% more productive than their Permian peers. That is precisely where the competitiveness of the local industry lies.

To make the export leap and attract the necessary capital that shale demands – which must be a continuous machine for drilling and completing and connecting wells – there is still a way to go. The key is to get closer to North American development costs. Today an unconventional well in the US ranges between 10 and 12 million dollars, compared to 12 to 14 million for the average well in Neuquén.

Beyond the fact that it is unfair to compare the development of oil activity in the main world economic power with Argentina, a medium-developed country that lives in almost permanent crisis, Vaca Muerta has shown productive growth, which is on the verge of take off if a series of conditions is generated.

In that sense, Javier Milei’s government raises great expectations in the sector, after the liberation of the oil market proposed by the Bases Law that is being debated in the Senate. It includes a broad reform of the Hydrocarbons Law, which garnered the support of the oil and political establishment.

The burden of taxes

Despite deregulation and the government-driven trend toward international prices, today each barrel of Vaca Muerta oil is at a tax disadvantage compared to Permian crude. In principle, in Argentina you pay a 8% withholdings on exportswhich does not apply in the US. And imports have a surcharge of the 17.5% Country Taxwhich together with the dollar clamp and the various exchange rates, spice up a breeding ground that threatens the foreign investments that are needed to reach the dream of one million barrels per day.

In Permian, taxes on bank debit and credit are not applied, nor import duties on equipment and spare parts, as is the case in Argentina. While North American oil activity pays a 25% profit rate, 10 points less than what applies in Argentina. Other advantages are the accelerated amortization of income tax, and losses for an indefinite period.

Each barrel sold by a United States producer receives a price determined by the WTI index. While Vaca Muerta crude oil is paid in relation to North Sea Brent minus export duties, and on many occasions national governments of various political stripes have removed them from international prices (creole barrel) to sustain fuel values ​​in the domestic market, to contain the inflationary flashes of the last decade.

Vaca Muerta’s labor cost is very lower

The greatest advantage of Vaca Muerta today is shown by the workforce, with costs four times cheaper than in the US. The megadevaluation At the beginning of Javier Milei’s administration, 118%, generated a great liquefaction of salary expenditure measured in dollars.

On average, a starting salary for an oil worker in the Permian is $85,000 a year, compared to the $20,000 a year for a Neuquén oil worker, according to the private report accessed by +e.