Argentine Oil and Gas Industry

THE
ARGENTINE
OIL AND GAS
INDUSTRY
- 2018 -
“ A snapshot ”
Prepared by On behalf of

ACKNOWLEDGEMENTS
Special thanks to Innovation Norways team in Brazil represented by Stein Gunnar Bondevik
and Michelle Duarte, for reviewing drafts and providing valuable feedback.
We also want to thank Nidia Alvarez, country manager Equinor Argentina for her thoughts
and input about the local industry.
Also, a special thanks to A2 Diseño for layout and design - www.a2disenio.com
DISCLAIMER
This Report has been prepared by Euro-Latin Capital on behalf of Innovation Norway for
informational purposes only. Euro-Latin Capital, and its respective officers, directors, em-
ployees or agents, and Innovation Norway does not endorse or guarantee the performance
or suitability of any introduced party or accept liability for the accuracy or usefulness of any
information contained in this Document. Euro-Latin Capital, nor Innovation Norway, do
not accept liability for any loss associated with the use of any information and any reliance is
entirely at the user’s discretion.
FOREWORD
THIS REPORT HAS BEEN PREPARED BY EURO-LATIN CAPITAL ON BEHALF OF INNOVATION NORWAY. THE MAIN OBJECTIVE IS TO GIVE THE READER
A SNAPSHOT OF THE ARGENTINE OIL AND GAS INDUSTRY. THE INFORMATION HEREIN HAS BEEN BASED UPON PUBLICLY AVAILABLE SOURCES,
THIRD-PARTY REPORTS AND PRESENTATIONS, PRESS RELEASES AND WEB-SITES (ALL REFERRED TO AS SOURCES).
About Euro-Latin Capital
Euro-Latin Capital is an advisory firm with strong regional focus
on Latin America. Euro-Latin Capital assists international clients in
seeking growth opportunities in Latin America (M&A advisory), or
support with setting up new business in the region. Its on-the-ground
team is composed of both Norwegian and local background and ex-
perience. While Euro-Latin Capital has expertise in a variety of indus-
tries, they have a particular strong focus and track record in the oil and
gas industry.
About Innovation Norway
Innovation Norway is the Norwegian Government`s most important
instrument for innovation and development of Norwegian enterpris-
es and industry, both locally and internationally. Innovation Norway
support companies in developing their competitive advantage and to
enhance innovation. Innovation Norway`s program and services are
intended to create more successful entrepreneurs, more enterprises
with capacity fro growth and more innovative business clusters within
Norway and globally.

EXECUTIVE SUMMARY
MATURE OIL & GAS NATION AND A
KEY PLAYER IN LATIN AMERICA
+ 100 years of history.
2nd largest gas producer in Latin America with
122 MM cubic meters per day.
4th largest oil producer with 485.000 bbl of oil
per day.
OFFSHORE DEEP WATER –
HIGH IMPACT EXPLORATION
Secretariat of Energy is preparing for the
Argentine Offshore Round 1, auctioning 38
blocks.
Launched expected to be October 2018.
Offers deliverred by February 2019.
Argentina will need to import advanced new technologies, services and digital innovation to
further develop its oil and gas industry.
Norwegian companies have the know-how, technology, equipment, service and supply contracts
required for the Argentine deep-water drilling. It is also an opportunity to take a role in the
digitalisation of unconventional operations as shale and tight extractions requires sophisticated
technologies to be cost efficient.
As local companies seek international partners, Norwegian companies are well-positioned to
contribute services or equipment to larger projects.
In order to succeed in the Argentine oil and gas industry it is vital to have local presence,
solid data, research and thorough understanding of corporate culture, as well as good under-
standing and knowledge of customers. Euro-Latin Capital (Argentina) and Innovation Norway
offer decades of experience, vast networks, local knowledge, and are familiar with Norwegian
business practices and requirements. We can actively assist, advice and help ensure a successful
experience in Argentina.
UNCONVENTIONAL UPSIDE
The worlds 2nd largest unconventional
technical recoverable resource potential of
gas (802 TcF).
The worlds 4th largest unconventional
technical resource potential of oil (27 bn
bbls).
ENERGY PLAN 2030 -
CAN BE A REALITY
1.5 million barrels of oil and 400 MM cubic
meters of gas per day within 2030?
Loma Campana and Fortin de Piedra
delivering strong production results of shale
oil and gas.
2023 or 2030 target depends on additional
projects with commercial production.
UNCONVENTIONAL PRODUCTION
ON STREAM, AND INCREASING
32% of total gas production comes from
unconventional gas (40 MM cubic meters
per day).
11% of total oil production comes from
unconventional oil (55.000 bbl per day).
NEW GOVERNMENT IMPLEMENTED
FRIENDLY MARKET POLICIES, BUT
STILL ECONOMIC TURMOIL
Inflation for 2018 above 40%.
Fiscal balance strongly needed.
IMF debt of US$ 57.1 bn will give flexibility, but
also comes with strict inflation and deficit
targets.
ARGENTINATODAYGOINGFORWARDKEYTAKEAWAYS
1.
4.
7.
2.
5.
3.
6.
ARGENTINE OIL AND GAS ACTIVITY REPRESENTS AN ATTRACTIVE OPPORTUNITY FOR NORWEGIAN COMPANIES

THE ARGENTINE OIL AND GAS INDUSTRY IS AT AN IMPORTANT JUNCTURE. AFTER YEARS OF CONTINUOUS
DECLINE IN ACTIVITY AND PRODUCTION RATES, THE INDUSTRY IS OPTIMISTIC DUE TO THE ENORMOUS
UNCONVENTIONAL (SHALE AND TIGHT) RESOURCE POTENTIAL.
INTRODUCTION
CONTENTS

ARGENTINA OIL AND GAS
A brief introduction
KPI’s
Production
The basins
Leading players
The regulatory framework
The stakeholders
A few KPI’s compared with Norway
UNCONVENTIONAL RESOURCES
An update

OFFSHORE
Argentine Offshore Bidding Round 1
ENERGY PLAN 2030

A GLANCE AT THE ECONOMIC
SITUATION
OPPORTUNITIES FOR NORWEGIAN
COMPANIES
1.
2.
3.
4.
5.
6.
The objective of this report is to give a snapshot of
the Argentine oil and gas industry to better under-
stand which possibilities and opportunities it may
represent for Norwegian investors. The report is di-
vided into 5 sections where the first provides a brief
introduction, including KPI`s, the basins, the leading
players, regulatory framework and stakeholders.
Section 2 provides a brief introduction and update
on the unconventional development with particular-
ly focus onVaca Muerta.
What about offshore? Argentina is preparing for the
Offshore bidding round 1 which is an important
milestone. Section 3 brings forward a brief overview
of the forthcoming bidding round which will be
launced in October this year.
Section 4 highlights some thoughts around the en-
ergy plan presented by the governments - the 5 year
plan (2023) and the long term objective for 2030
Section 5 provides a glance at the current economic
situation in Argentina.
Finally, Section 6 brings forward some reflections of
the opportunities the Argentine oil and gas industry
may represent for Norwegian companies.
Abbreviations
Bbl = Barrels
Bn = Billion
Btu = British thermal unit
M = Thousand
MM = Millions
m3
= Cubic meters
TcF = Trillions cubic feet

OIL WAS DISCOVERED FOR THE FIRST TIME IN 1907, IN SAN
JORGE BASIN NEAR COMODORO RIVADAVIA IN THE PROV-
INCE OF CHUBUT. ARGENTINA WAS THE SECOND NATION
TO ESTABLISH A NATIONAL OIL COMPANY AS YPF WAS
FOUNDED IN 1922.
KPI’s
Production
The basins
Leading players
The stakeholders
1.
Throughout the years, Argentina has been a key player in the South
American oil and gas industry, and is currently ranked as the 2nd
gas - and 4th oil producer.
After years of self-sufficiency and after being a net exporter, gov-
ernmental interference, changing regulations and price controls
reduced the overall field activity. As a result, production started to
drop year by year, and in 2010 the country became a net import-
er. However the outlook is promising as Argentina has the worlds
2nd largest unconventional gas resource potential and 4th largest
unconventional oil resources.
With the US shale boom fresh in mind and its positive effect on the
US economy, the Argentine government has set development of
Vaca Muerta (and Los Molles) as a top priority in order to solve its
energy crisis and potentially recover self-sufficiency.
This year is also an important milestone for the oil and gas industry
as it is about to initiate the Offshore Bidding Round 1. Although
historically several wells have been drilled offshore and close to
17% of current natural gas production already comes from offshore
wells, it is an important milestone to commence the deep-water
activity as in its neighbouring countries Brazil and Uruguay .
1907
First discovery of oil in San Jorge Basin,
Chubut, Argentina
1980
Argentina became self-sufficient of oil
2006
The Argentine gas production peaked
production at 142 MM cubic meters per
day
1922
Argentina founded YPF SA as 2nd nation
worldwide to create a national oil company
1998
The Argentine oil production peaked
production at 900.000 bbl of oil per day
2010
Argentina became net importer of
energy, after some years of decreasing
production.
Large shale oil discovery in Vaca Muerta at
Loma Campana, Neuquen basin.
2011
First horizontal well drilled in Vaca Muerta
2012
Expropriation of 51% of YPF
2018
Unconventional oil production passes 50.000
bbl of oil per day, and 40 MM cubic meters of
gas per day
2017
Equinor entered Argentina and the Neuquen
basin

KPI’s
Production
The basins
Leading players
The stakeholders
1.
Mbbl of oil per day
Bn bbl in proved reserves of oil
MM cubic meters per day of natural gas
TcF in proved reserves of natural gas
2nd largest technically recoverable uncon-
ventional resources of gas in the world
4th largest technically recoverable uncon-
ventional resources of oil in the world
Gas producer in Latin America
Oil producer in Latin America
Producing basins
Qualified workers
oil and gas operators
485
2.2
129
11.3
802TcF
27bn bbl
2nd
4th
5
100k
60 BP statistical review 2018
IAPG statistics April 2018
CIA World Factbook
Photo: https://www.goodfreephotos.com

-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
2005 2007 2009 2011 2013 2015 2017 Jun-18
KPI’s
Production
The basins
Leading players
The stakeholders
1.
AFTER DECADES OF DECLINING PRODUCTION, THE TREND HAS TURNED THROUGH INCREASED VOLUMES
FROM UNCONVENTIONAL ACTIVITY
The growing production is aligned with the higher
number of wells drilled compared to similar period last
year. Going forward, the industry is expecting this trend
to continue as the pipeline of projects (unconventional
in particular) is strong, combined with continued stable
WTI-price forecast.
HISTORICAL OIL PRODUCTION (in bbl per day)
# OF WELLS DRILLED PER YEAR
HISTORICAL GAS PRODUCTION (in Mm3
per day)
Q2-2018 VERSUS Q2-2017
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2005 2007 2009 2011 2013 2015 2017 Jun-18
485.000 bbl per day
+5% vs Q2-17
129 MM m3
per day
+5.4% vs Q2-17
356 wells drilled
+20% vs Q2-17
SOURCE: IAPG statistics April 2018

KPI’s
Production
The basins
Leading players
The stakeholders
1. CUYANA BASIN
5.1% 24.445 bbl per day
0.1% 154 Mm3
per day
NEUQUEN BASIN
41.4% 204.091 bbl per day
58.2% 75.834 Mm3
per day
SAN JORGE BASIN
48.5% 231.919 bbl per day
11.5% 13.342 Mm3
per day
NORESTE BASIN
1.2% 5.352 bbl per day
5.0% 5.851 Mm3
per day
AUSTRAL BASIN
3.8% 18.983 bbl per day
25.2% 32.104 Mm3
per day
OFFSHORE BASINS (DEEP WATER)
IN EXPLORATION PHASE,
NO PRODUCTION

KPI’s
Production
The basins
Leading players
The stakeholders
1.
MAIN OIL PRODUCERS MAIN GAS PRODUCERS
OTHER OIL & GAS PRODUCERS
46 % 39 %
5 %
2 %
7 %
13 %
14 %
4 % 4 %
4 %
3 %
18 %
20 %
21 %
Others
Others

THE ENFORCEMENT AUTHORITY OF THE HYDROCARBONS LAW
IS THE SECRETARIAT OF ENERGY (MINEM) OR THE PROVINCIAL
ENFORCEMENT AUTHORITY, DEPENDING ON THE LOCATION OF
THE HYDROCARBON FIELDS.
KPI’s
Production
The basins
Leading players
The stakeholders
1.
Onshore located oil and gas fields + fields off coast up to 12 nautical
miles belong to the provinces.
Offshore located oil and gas fields beyond 12 nautical miles belongs
to the federal state with the Ministry of Energy – MINEM, as the
enforcement authority.
The federal state is in charge of designing the national energy
policies that the provinces shall follow. The unit, which was until
recently a ministry, has been absorbed by the Ministry of Finance
and is named - The Secretariat of energy (MINEM) and is in charge
of the Oil and Gas Company Register and the Hydrocarbon Invest-
ments National Registry.
The O&G legal framework is based
upon the hydrocarbon law no 17,319
(as of 1967)– with certain important
amendments in recent years:
EXPLORATION PERMITS:
Conventional fields:
6 years (3+3) plus 5 years extension
Unconventional fields:
8 years (4+4) + plus 5 years extension
Offshore fields:
8 years (4+4) plus 5 years extension
EXPLOITATION CONCESSIONS:
Conventional fields:
25 years plus unlimited 10 years extension
Unconventional fields:
Offshore fields:
ROYALTIES:
Ratification of 12% royalty of the production,
with the possibility of adding 3% upon extension
(total cap of 18%).
Possibility of reducing royalties up to 25% for
unconventional fields.
Possibility of reducing royalties up to 50% for
certain offshore fields.
SOURCE: Law No 21,197 / Law no 26,741 / Law No 27,007
Law no 21,197 (2007) – onshore oil and gas
fields belong to the provinces
Law no 26,741 (2012) –expropriation of 51% of
YPF SA, and a national registry of oil and gas
companies
Law no 27,007 (2014) – updating the 1967 law
reflecting today’s reality regarding technology,
the unconventional resource potential and the
strong need of self-sufficiency.
LAW NO. 27,007 – OCTOBER 2014 (IMPORTANT AMENDMENTS TO LAW 17,319 OF 1967)

THE MAIN STAKEHOLDERS IN THE ARGENTINA OIL AND GAS INDUSTRY
KPI’s
Production
The basins
Leading players
The stakeholders
1.
THE FEDERAL STATE
Secretariat of Energy (MINEM) is the controlling
unit. MINEM will be in charge of the Offshore
Round 1
* The government has not made a new logo yet
reflecting the Secretariat
THE PROVINCES
OFEPHI - the federal organisation of hydrocarbon
producing states was created in 1986 to represent the
common interests of Argentina’s hydrocarbons-
producing provinces.
Several provinces have their own OIL & GAS company
which takes a non-paying interest in the fields (e.g..
GyP Neuquen, Fomicruz).
THE OPERATORS
In Argentina there are approximately 60 active
O&G companies (compared to +/- 200 in
Colombia)
THE SERVICE COMPANIES
Many of the main international drilling
companies are present in Argentina.
LABOR UNIONS
The labour unions have a strong role in the
sector (in particular 3– Neuquen, Santa Cruz
and Chubut)
The federal government agreed to extend
the Gas Plan followed by an annual decrease.
They committed to maintain USD 7.5 per
million Btu in 2018, thereafter USD 7 in 2019,
USD 6.5 in 2020 and USD 6 in 2021. From
2022 and onwards, the price will reflect the
market prices.
The province of Neuquén made a commit-
ment to not implement new taxes, more
infrastructure particularly within transport
and railroads. The oil and gas companies/
operators committed themselves to maintain
high investments starting with a minimum of
USD 15 billion in 2018.
The union agreed to a new labour agreement
which will make Vaca Muerta exploration
more flexible from a operators perspective,
with an increased focus on safety for the
workers.
THE AGREEMENT WAS WELL RECEIVED IN
THE MARKET, AND WAS
REPLICATED IN THE PROVINCE OF CHUBUT
(SAN JORGE BASIN) AND IN SANTA CRUZ
2017 LABOR FRAMEWORK
IN 2017, THE FEDERAL GOVERN-
MENT TOGETHER WITH THE PROV-
INCE OF NEUQUEN, THE UNIONS
AND THE MAIN OPERATORS (YPF,
PAN AMERICAN ENERGY, CHEVRON,
TOTAL, DOW AND SHELL) ENTERED
INTO AN AGREEMENT WHERE EACH
STAKEHOLDER MADE A COMMIT-
MENT WITH PARTICULAR EMPHASIS
ON VACA MUERTA ACTIVITY.

KPI’s
Production
The basins
Leading players
The stakeholders
A few KPI’s compared with
Norway
1.
802 27
UNCONVENTIONAL GAS
RESOURCES
(in TcF)
UNCONVENTIONAL OIL
RESOURCES
(in billion barrels)
485
3 x
802 x 27 x
3 x 3,6 x 5,2 x
129 2,2 11,31613 367 7,9 60,6
OIL PRODUCTION (Apr.2018)
(in thousand bbl/day)
GAS PRODUCTION (Apr.2018)
(in million cubic meters/day)
OIL PROVED RESERVES (2017)
(in million barrels)
GAS PROVED RESERVES (2017)
(in TcF)
NORWAY IS CURRENTLY No
15 ON THE 2017
LIST OF PRODUCING OIL NATIONS BY US
ENERGY INFORMATION ADMINISTRATION
(EIA), WHILE ARGENTINA IS No
27.
While most countries have a natural declining
production curve, Argentina’s shale and tight
production may convert its significant amount
of technically recoverable resources into re-
serves the coming years and potentially moving
Argentina up on EIA’s list
SOURCE: EIA World Shale Resource Assessments, Sept. 2015 / BP Statistical report 2018 / IAPG April 2018

2.
CHINA CHINAALGERIA RUSSIAUS USARGENTINA ARGENTINA
UNCONVENTIONAL
RESOURCES
An update
2nd 4th 27
Bn
802
TcF
Largest global
unconventional
resource potential
of natural gas
largest global
unconventional
resource potential
of oil
of oil barrels of
technically
recoverable
unconventional
resources
of technically
recoverable
unconventional
resources
ACCORDING TO STUDIES PERFORMED BY EIA, AR-
GENTINA POSSESSES AN ENORMOUS POTENTIAL OF
UNCONVENTIONAL RESOURCES . EIA ESTIMATES THAT
ARGENTINA HAS THE WORLDS 2nd LARGEST GLOBAL
TECHNICALLY RECOVERABLE RESOURCES OF UNCON-
VENTIONAL GAS (802 TcF), AND THE WORLDS 4th
LARGEST TECHNICALLY RECOVERABLE RESOURCES OF
UNCONVENTIONAL OIL IN PLACE (27 BN BBL).
The key challenge and opportunity is to convert these esti-
mates into reserves, and the sector, led by YPF, has progressed
in an impressive manner and production is already increasing.
This progress, combined with the resources in place, gives an
enormous optimism for the future as increased unconven-
tional production not only gives increased income to both the
province and federal state through royalties and taxes, but
also creates new jobs (+100.000 at full development)
1115 78802 74706 32622 27
SOURCE: EIA World Shale Resource Assessments, Sept. 2015

2. UNCONVENTIONAL
RESOURCES
An update
THE UNCONVENTIONAL RESOURCE POTENTIAL IS
LOCATED THROUGHOUT ARGENTINA. HOWEVER,
THE NEUQUEN BASIN HOLDS 70%, SPLIT BETWEEN
THE VACA MUERTA FORMATION AND LOS MOLLES/
LAJAS FORMATION.
For many, Vaca Muerta is synonymous with the overall unconven-
tional resources. This is not correct as Vaca Muerta refers to the
shale oil and gas located in the Vaca Muerta Formation. In fact, a
significant part of the unconventional resource potential in Neu-
quén is tight oil and tight gas. These hydrocarbons are located in
the formations Los Molles and Lajas. Currently, the main increase
in unconventional gas production is tight gas.
Basin
Neuquen
San Jorge
Austral
Others
Formation
Vaca Muerta
Los Molles
Aguada Bandera
Pozo D-129
L.Inoceramus
GAS
(TcF)
308
275
583
51
35
86
129
4
802

OIL
(Bn of bbl)
16.2
3.7
19.9
0
0.5
0.5
6.6
0
27
SOURCE: EIA World Shale Resource Assessments, Sept. 2015
IMAGE: www.allaboutshale.com
of the technically recoverable unconventional
resources is based in Neuquen basin
TOTAL UNCONVENTIONAL RESOURCES
70%

2. UNCONVENTIONAL
RESOURCES
An update
FROM A TECHNICAL POINT OF VIEW, VACA MUERTA POSSESSES A HIGH QUALITY SHALE ROCK WITH
STRONG SIMILARITIES TO THE MAIN SHALE PLAYS IN US WITH HIGH TOTAL ORGANIC CONTENT (TOC),
HIGH THICKNESS AND PRESSURE. IT IS ALSO AN ADVANTAGE BEING PRESENT IN A BASIN WITH OVER
90 YEARS OF OIL AND GAS ACTIVITY. BUT TO HAVE A QUALITY ROCK IS NOT SYNONYMOUS WITH HAV-
ING A SUCCESSFUL SHALE INDUSTRY
SOURCE: EIA World Shale Resource Assessments, Sept. 2015 /
YPF Q2-2018 quarterly report
Through nine decades of exploration and develop-
ment of conventional hydrocarbons in Neuquen,
the local industry has definitely built up an O&G
culture in the province. Drilling and completion rigs,
roads, pipelines, facilities are all a well-established
and common factor in oil and gas discussions and
planning.
Notwithstanding, these are also factors that easily
can be converted into bottlenecks once the activity
ramps up. Additional rigs, new roads, and exten-
sion of pipelines, improved logistics and transport
solutions, additional workforce are all factor highly
needed rather sooner than later. If not, it will slow
down the development.
Another important factor is cost efficiency. Develop-
ment and operating costs needs to be closer to the
US market.
According to YPF, the costs are developing the right
direction as through improved learning curve and
access to new technology.
Play Type TOC
(%)
Tickness

(mts)
Pressure

(psi)
Vaca
Muerta Oil
&
Gas 3-‐10 30-‐450 4.500-‐9.500
Eagle
Ford Oil
&
Gas 3-‐5 30-‐100 4.500-‐8.500
Barnett Gas 4-‐5 60-‐90 3.000-‐4.000
Haynesville Gas 0.5-‐4 60-‐90 7.000-‐12.000
Marcellus Gas 2-‐12 10-‐60 2.000-‐5.500
Wolfgang Oil 3 200-‐300 4.500
0
5
10
15
20
25
30
35
2015 2016 2017 1H2018
YPF
shale
costs
Development
cost

(USD
/
boe)
OPEX
(USD
/
boe)
Cost
horizontal
well

(kUSD//lat.feet)

2. UNCONVENTIONAL
RESOURCES
An update
10% 31%9.3%of the total OIL
production came
from Vaca Muerta
formation (shale)
of the total GAS pro-
duction came through
unconventional gas
(tight+shale)
of the total GAS
production came
from Vaca Muerta
formation (shale)
AS OF THE FIRST QUARTER OF 2018, TIGHT AND SHALE OIL PRODUCTION ACCOUNTED FOR 11% OF THE
OVERALL PRODUCTION, WHILE SHALE/TIGHT GAS PRODUCTION ACCOUNTED FOR AS MUCH AS 32%. BASED
UPON CURRENT ACTIVITY, THIS TREND SEEMS TO CONTINUE.
From Vaca Muerta, around 708 active wells produced more than 48.000 bbl per day, while production of tight oil accounted for 7.000
bbl per day. Hence, unconventional production reached 55.000 bbl per day.
With respect to gas production, tight gas was the main contributor. Tight gas produced close to 28 MM m3
per day, while Vaca Muerta
shale gas accounted for 12 MM m3
per day. Combined , unconventional gas production was approximately 40 MM m3
per day.
60000
30
35
40
Tight
Shale
Tight
Shale
50000
25
40000
2030000
15
20000
10
10000
0 0
5
2008 20082009 20092010 20102011 20112012 20122013 20132014 20142015 20152016 20162017 2017
10/2018
10/2018
(in bbl/day) (in MM m3
/day)
SOURCE: Ministry of Energy, Energy Minister Javier Iguacel Presentation
June-2018, 31st of April 2018 – Subsecretaria de la Provincia de Neuquen

2. UNCONVENTIONAL
RESOURCES
An update
+USD 1000 10.000 -50% 4700
million in investments new jobs in logistics costs years to
complete
km in train line
IN JUNE 2018, THE MINISTRY OF TRANSPORT ANNOUNCED A TENDER FOR USD 500 MILLION TRAIN LINE IN
ORDER TO IMPROVE THE INFRASTRUCTURE OF VACA MUERTA AND NEUQUEN DEVELOPMENT – THE NORPA-
TAGONICO.
SOURCE/IMAGE: MINISTRY OF TRANSPORT, ARGENTINA - reactivación de los trenes de
carga línea roca.pdf / MINEM presentation Houston sept.2018 Plan Energetico 2030
The train would connect the Neuquen province with the port of Bahia
Blanca more than 700 km away and is estimated that the transporta-
tion cost will be reduced by 50%. The project will include 250km new
rails and 390km of upgrading existing tracks.
This project may be an important part of improving the infrastructure
challenge, which is a key to improve the potential of Vaca Muerta in
order to be cost-efficient.
The main purpose of the train line is to reduce the cost of important
supplies e.g. transport cost of sand for fracking and tubes used for
drilling. Equipment and sand are currently transported by trucks which
is a lot more costly than rail transport.
According to the government, the intention is also to use the train for
other sectors like mining and fruits, where products may be brought
back to the port.

3. OFFSHORE
Introduction
OFFSHORE EXPLORATION AND DEVELOPMENT IS NOT NEW IN ARGENTINA. HISTORICALLY, MORE THAN 140
OFFSHORE WELLS HAVE BEEN DRILLED, BUT NEARLY ALL ON SHALLOW DEPTHS. TODAY ONLY TWO OFF-
SHORE PROJECTS HAVE COMMERCIAL PRODUCTION.
SOURCE: www.wintershall.com / TOGY REPORT 2018
IMAGE: www.wintershall.com / TOGY REPORT 2018
Notwithstanding, one of these two projects, Cuenca Marina Austral 1 (CMA-1)
accounts for 17% of the overall gas production in Argentina,
Wintershall, Total and Pan American have developed projects off coast
Tierra del Fuego since 1979. In 1989, the Hidra field started producing and
in 2016 the consortium started up the Vega Pleyade offshore project in the
CMA-1 concession. In 2017, this project alone produced nearly 20 million cubic
meters per day of natural gas . A new field development of CMA-1 has been
initiated , where USD 1bn may be invested bringing the Fenix field up to 10
MM m3
/ day in gas production.
Another advanced project is Enap and YPFs project in the area Magallanes
located south in the Santa Cruz province. Together, they recently initiated a
new US$ 354 million project to increase the production of natural gas to 4
million cubic meters per day, from current 2.4 million. In addition to increase
the oil production by 25% (from 5.000 bbl per day to 6.500 bbl per day).
ALTHOUGH BOTH PROJECTS ARE RELATIVELY NEAR-SHORE (20KM) THEY
CONTRIBUTE (APART FROM SIGNIFICANT PRODUCTION LEVELS) IMPORTANT
KNOW-HOW AND EXPERIENCE WHICH MAY BE APPLIED TO NEW OFFSHORE
PROJECTS.
72% 32% 17%CMA-1 BLOCK OF AUSTRAL BASINS
GAS PRODUCTION
OF AUSTRAL BASINS
OIL PRODUCTION
OF OVERALL GAS
PRODUCTION ARGENTINA
OR

3. OFFSHORE
Argentine Offshore Bidding
Round 1
ARGENTINE OFFSHORE ROUND 1
TO COMMENCE IN OCTOBER 2018
OFFSHORE EXPLORATION AND DEVELOPMENT IS PART OF THE GOVERNMENTS ENERGY PLAN GOING
FORWARD. THE PLAN INVOLVES 3 BIDDING ROUNDS (ROUND 1,2 AND 3), WHERE THE FIRST IS TO BE
LAUNCHED OCTOBER THIS YEAR.
SOURCE / IMAGE: Presentation Houston sept.2018 by
Energy minister Javier Iguacel - Energy Plan 2030
The government has initiated the process to further explore the potential
offshore Argentina, including deep-water. The process started in 2016 with
initial studies and conversations with +60 E&P companies . As part of this,
the government granted two seismic permits to the Norwegian company
Spectrum who shot seismic at two of the offshore basins, Argentine - and
Malvinas basin. In addition, seismic permits was granted to YPF and the
seismic company Searcher Seismic as well.
In October this year the Argentine Secretariat of Energy will launce the
Argentine Offshore Bidding Round 1, where 38 blocks will be awarded. The
final term and conditions will be set forward in the official decree, but initial
information indicates that the blocks involved in the first round will be
Argentine Basin - 7 deepwater and 7 ultradeepwater blocks , Austral Basin
- 6 shallow water blocks , Malvinas West Basin - 18 deepwater blocks.
According to the officials, the interest in the preliminary rounds of discus-
sions has been promising, and it is expected that the main global offshore
companies will participate. For the Norwegian market, it will be interesting to
see whether Equinor or other Norwegian related E&Ps will participate
According to the officials it is anticipated to be launched during October this
year. Meanwhile, all information in this report is based upon the prelimi-
nary set of information presented by the MINEM earlier in 2018. Hence, it is
important to reiterate that final terms and conditions will be presented in the
official decree.
ARGENTINA
BASIN
AUSTRAL
BASIN
MALVINAS WEST
BASIN

3. OFFSHORE
Round 1
REGULATOR
The Secretariat of Energy
OFFERDUEDATE:FEB.2019
AWARD RESULTS: DURING 2019
SOURCE: MINEM – workshop No 6, preliminary information / Presenta-
tion Houston sept.2018 by Energy minister Javier Iguacel - Energy Plan 2030
THE BIDS(ROUND 1)
Terms and conditions presented in this
section is in a preliminary phase. Any
final terms/procedures/ conditions will be
set forward in an official decree which is
anticipated to be launced in October 2018
THE EXPLORATION
PERMITS
AND EXPLOITATION
CONCESSIONS
Bids based upon offered Work Units (Commitments)
- Each block will have a i) minimum working unit (WU)
equivalent to a 4x4 or 3x3 km of 2D seismic in 100% of the block
and ii) basic WU equivalent to 20% to 40% of 3D seismic of the
surface of the block
- Each WU represent USD 5000.
- WU in excess of the amount committed in one period may be
carried forward to the following period in line with Art. 20 of
the Law
- Committed WU not fulfilled in one given period shall be paid in
cash or MINEM will execute the guarantee.
Exploration permit
- May be given for three period (4+4+5 years) for all blocks
- No relinquishment after 1st
period, and only 50% relinquishment after
2nd
period
- Relinquishment available at any time provided commitments have been
fulfilled
Exploitation Concession
- 30 years + 10 years extension (may obtain successive extensions)

3. OFFSHORE
Round 1
SOURCE: MINEM – workshop No 6, preliminary information
WORK PROGRAM
No obligations to drill a well in the 1st period
Obligation to drill a well in the 2nd period and a
well in the extension period.
The obligatory well of the 2nd period may be
postponed to the 3rd period if MINEM understands
there is a relevant and solid technical or economic
justification.
Changes to the program presented in the bid can
be done with the approval by MINEM.
However, to give further flexibility going forward,
MINEM has proposed that the companies can make
changes to the program without MINEM’s approval
of up to 40% of the Working Units committed, but
only in the case that 40% is already fulfilled either
with 2D seismic, 3D seismic, or drilling of a well
(including casing, coring, testing).
However, there will be no possibility to exchange
WU between adjacent blocks.
ROYALTIES
Royalties between 5% - 12% (set according to a
formula, based upon sales, previous exploration
costs and investments)
Royalty of 1% starting from the 6th year of produc-
tion and increasing 1% per year up to 7% in year
12 for blocks farther than 200 miles from coastline.
LOCAL CONTENT
Bidder
Bidder shall be an Argentine firm. Foreign com-
panies will be able to bid, with the commitment
to open a local vehicle if one of the blocks is pre
awarded
Work force
The Hydrocarbon Law requires a minimum of 75%
of local employees but states that “this minimum
shall be reached within the time-frame set by the
regulations or tenders”.
E.g. in the exploration phase companies shall pres-
ent every year their program to train local people
and increase % of locals.
Providers/Suppliers
No local content commitment shall be required
except of the general applicable laws where local
providers may potentially enjoy certain price
preferences..
REQUIREMENT OPERATOR A
Production > 20.000 boe/day average 2015/16/17.
- This requirement may be achieved demonstrating
the operation of at least 3 exploration wells in water
of more than 1000 m. in the last 10 years
- Operated at least in one block in the last 15 years
in waters deeper than 500 m. depth (exploration or
exploitation)
REQUIREMENT OPERATOR B
Production > 10.000 boe/d average 2015/16/17.
the operation of at least 3 exploration wells in water
of more than 100 m. in the last 10 years
- Operated at least in one block in the last 15 years
in waters deeper than 100 m. depth (exploration or
exploitation)
REQUIREMENT OPERATOR C
Production > 5.000 boe/d average 2015/16/17.
the operation of at least 3 offshore exploration wells
in the last 10 years.
- Operated at least in one block in the last 15 years in
offshore (exploration or exploitation)

4.ENERGY PLAN 2030
1.000k
1.500k
+54%
+70%
+80%
+80%
2023
+830k
+957k
2.941
8.755
+US$
23bn
+US$
72bn
238
400
targeted production
of bbl of oil
per day in 2023
targeted production
of bbl of oil
per day in 2030
growth
compared to
Jun-2018
growth
compared to
Jun-2018
growth
compared to
Jun-2018
growth
compared to
Jun-2018
Employees
Associated with oil
and gas in Argentina
Peak volume of
workers in oil and
gas Argentina 2018-
2030
New unconventional
wells 2018-2023
New unconventional
wells 2018-2030
On investments
in unconventional
oil&gas within 2023
On investment in
unconventional
oil&gas within 2030
MM m3
per day of
gas in 2023
MM m3
per day of
gas in 2030
SOURCE: MINISTRY OF ENERGY, Minister Javier Iguacel, Presentation
”Pasado, presente y futuro de la energia en Argentina” August 2018 / Pres-
entation Houston ”plan energetico 2030” sept. 2018
ALTHOUGH PROJECTS LIKE LOMA CAMPANA (YPF) AND FORTIN DE PIEDRA
(TECPETROL) HAVE BEEN HIGHLY SUCCESSFUL, A STRONG PREDICTION OF
THE PRODUCTION RATES FOR BOTH 2023 AND 2030 WILL HIGHLY DEPEND ON
CREATION OF ADDITIONAL COMMERCIAL DEVELOPMENT PROJECTS
The pipeline of announced projects or announced investments is long. Local
companies like Pampa Energia, Pan American, Pluspetrol, and interna-
tional players like Total, Equinor (ex Statoil), Exxonmobil and Shell have
all announced important investments in Vaca Muerta. While some have
commenced, others are about to start. Hence, the remaining part is to see
whether they may be converted into commercial projects like Loma Campana
and Fortin de Piedra.
Fortin de Piedra – an example to follow
Tecpetrol (Techint) has invested US$ 1.4bn in Fortin de Piedra and currently
41 wells are producing 11 MM cubic meters of gas per day. Additional 26
wells are in process to be completed, estimating a production of 17 MM cubic
meters of gas per day at the end of 2018. This represents +7% of the overall
2023 production goal and 4% of the 2030 target. As Tecpetrol will drill up to
150 wells within 2019 at Fortin de Piedra, the share of total production will
likely increase.
- PETER DRUCKER -
“
”
The best way
to predict
the future
is to create it
2030

A GLANCE AT THE
ECONOMIC
SITUATION
5.

5. A GLANCE AT THE
ECONOMIC SITUATION
-50%
US$ 57.1
60%
+40%
-2,4%
13%
2.6%
23%
Depreciation of Argen-
tine peso towards USD
since January 2018
Billion
in IMF loan
arrangement
Central Bank’s bench-
mark interest rate
(per 1.sept 2018)
Inflation rate
estimated for 2018
economic decrease
estimated for 2018
Inflation rate target
for 2020
-0,5%
economic decrease
estimated for 2019
9%
Inflation rate target
for 2021
fiscal deficit on GDP
for 2018
Inflation target for
2019
2019 – AN ELECTION YEAR
2019 is a presidential election year. Although
current economic turmoil has affected the sitting
government, it is to early for any predictions. On
the other side, the oposition has yet to announce
any clear candidates.
ECONOMIC TURMOIL
Argentina is currently under a severe economic
pressure with high inflation reaching +40% for
2018, a Peso at all-time low (currently ar$ 40 per
US$) and a Central bank benchmark interest rate
of 60%.
To overcome this economic turmoil, President
Macri declared an economic crisis and expressed
the urgent need to cut public spending and im-
pose new export taxes. “This is not just another
crisis. Its has to be the last” (President Macri,
Monday 4th of Sept.). To restore confidence in the
economy the government announced certain
new measurements where the main objective is
to reduce the primary fiscal deficit to 0% of GDP
in 2019 (projected 2.6% 2018), and a primary fiscal
surplus of 1% in 2020. This will be done through
reduction of fiscal spending, a reduction of
subsidies in transport and energy, a reduction of
the states operational cost (Eliminating ministries)
and an increase in export taxes (4 pesos per dollar
exported). Simultaneously, the government will
increase the welfare spending to mitigate the
impact of the crisis towards the most vulnerable
sectors.
IMF Agreement
In order to provide more financial flexibility and
avoid additional expensive debt, Argentina and
the International Monetary Fund (IMF) announced
the 26th of Sept.2018 and agreement of us$57.1
billion arrangement, whereof us$13,4 billion will
be provided during the remaining months of 2018
in order to cover the short term needs avoid addi-
tional expensive external for debt, and therefore
calm down the markets.
The economic outlook
According to the government the IMF funds will
improve short term solvency indicators and in
combination with reduced fiscal deficit the confi-
dence in the market will be regained.
Going forward, President Macri is fully committed
to fiscal discipline and fiscal balance. As part of
this the oil and gas sector can play a major part
as increased production will increase income
through royalties and corporate taxes, and reduce
need for energy imports. Plus, creating more jobs.
- SUN-TZU -
“
”
In the midst
of chaos,
there is also
opportunity

OPPORTUNITIES
FOR NORWEGIAN
COMPANIES
6.

6. OPPORTUNITIES FOR
NORWEGIAN COMPANIES
IN PREVIOUS SECTIONS, WE HAVE SHOWN THAT THE
ARGENTINE OIL AND GAS INDUSTRY IS BOOSTED BY IN-
CREASED VACA MUERTA ACTIVITY AND THE OFFSHORE BID-
DING ROUND. BOTH THESE SUB-SECTORS REPRESENT(S)
ATTRACTIVE OPPORTUNITIES FOR NORWEGIAN COMPANIES
AS THE LOCAL INDUSTRY DEPENDS ON TECHNOLOGY, DIGI-
TAL INNOVATION AND INVESTMENT CAPITAL TO GROW.
Over 500 companies are providing specialized services to the local
oil and gas industry, and another 3.000 participate in the val-
ue-chain. The majority of these have been focused on conventional
operations for decades. However, unconventional and offshore
operations are complex and need new advanced technologIes and
digital innovation to become sustainable and cost efficient
This creates opportunities for Norwegian companies who can offer
the required expertise, quality and reliability of services, products
and innovative solutions. Vaca Muerta and the offshore industry
will also generate new business models where local companies will
partner up with international players opening the possibility for
smaller Norwegian companies to participate with its products in
larger projects.
For a Norwegian company to prevail and succeed in the argentine
oil and gas industry, it is vital to have local presence, solid data,
research and thorough understanding of corporate culture as well as
good understanding and knowledge of customers.
Euro-Latin Capital (Argentina) and Innovation Norway offer
decades of experience, vast networks, local knowledge, and are
familiar with Norwegian business practices and requirements.
We can actively assist, advice and help ensure a successful entry in
Argentina.
Value Chain
Oil & Gas Operators
Seismic
Drilling
Suppliers / Equipment /
techlology
Norwegian related companies
involved in the Argentine Oil and Gas
The Diversity of Norwegian
Service and Supply Industry
Value Chain
Oil & Gas Operators
Seismic
Drilling
Suppliers / Equipment /
techlology
Norwegian related companies
involved in the Argentine Oil and Gas
The Diversity of Norwegian
Service and Supply Industry
VALUE CHAIN Norwegian related companies involved
in the Argentine Oil and Gas
Oil & Gas Operators
Seismic
Drilling
Suppliers/Equipment/
Technology
IMAGE: Norwegian Ministry of Energy

We hope this report provides a
valuable insight in an interesting
oil and gas nation, and hopefully
it may generate further interest to
explore the possibilities and
opportunities it may represent
for your company.
For further inquiries or comments
we invite you to contact Euro-Latin
Capital or Innovation Norway’s South
America team.

Argentine Oil and Gas Industry

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