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Weatherford Drilling says in rig pact negotiations for Argentina

BUENOS AIRES – Weatherford Drilling International is negotiating rig contracts for deployment in Argentina where foreign energy majors are exploring one of the world’s largest shale resources, a senior company official said on Thursday.

Warren Levy, the firm’s operations director for Latin America, described the South American country as a “target market” that had stayed strong even after international oil prices had spiraled downward.

“In the next two to three months, we would expect to have contracts in hand and be moving equipment,” Levy said in an interview. “Over the next five to 10 years, we see only upside in Argentina.”

“There is a fundamental macroeconomic need for Argentina to increase its production. The infrastructure is here, the workforce is here and the ability to explore, find and develop the resource is quicker than in most countries.”

Weatherford Drilling International, the drilling arm of oil services company Weatherford International Plc, currently has no rigs in Argentina.

State-run energy firm YPF estimates $200 billion is required over the next decade to exploit the barely-tapped Vaca Muerta shale play, which covers an area the size of Belgium, and reverse the country’s energy trade deficit.

Firms in Vaca Muerta, which lies under Patagonia’s windswept plains, were cutting exploration costs quicker than expected, Levy said. But he added the number of rigs in use and tough labor regulations meant Argentina would struggle to replicate the supply chain efficiency of the United States.

In related news, Weatherford to cut 5,000 jobs as it fights oil slump.

This article was from Reuters and was legally licensed through the NewsCred publisher network.

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