Vaca Muerta Shale—Taming a Giant

Vaca Muerta Shale—Taming a Giant Unconventional resource plays revolutionized oil and gas production in North America. Because these types of plays provide many challenges to operators, they have been slow to develop in other parts of the world. However, the Vaca Muerta formation in the Neuquén basin of Argentina can now be added to the list of successful producers. The triumph in the Vaca Muerta play resulted from engineers at YPF, SA and Schlumberger collaborating on an integrated approach that includes field- and formation-specific workflows and the application of a dynamic unconventional fracture model to optimize hydraulic stimulation programs. Matías Fernández Badessich Coaxing commercial quantities of hydrocarbons Technically Recoverable Shale Gas Damián E. Hryb from unconventional reservoirs revolutionized US Mariano Suarez the oil and gas industry in North America. The Others 20% 15% YPF, SA lessons learned there are now being applied in Buenos Aires, Argentina other parts of the world. One of the latest success Brazil 3% China stories comes from the giant Neuquén basin of Russia 14% Laurent Mosse Argentina, where YPF, SA is developing the Vaca 4% Nuncio Palermo Muerta Shale formation for production of oil and South Africa Stéphane Pichon 5% natural gas. Australia Argentina Laurence Reynolds 6% 10% Buenos Aires, Argentina Production from shale reservoirs traces its roots to activities in the Barnett Shale of north- Mexico Canada Algeria Oilfield Review 28, no. 1 (January 2016). central Texas, USA. In 1981, Mitchell Energy & 7% 7% 9% Copyright © 2016 Schlumberger. Development Corporation drilled a well for the Mangrove, Petrel and UFM are marks of Schlumberger. express purpose of producing natural gas from 1. US Energy Information Administration (EIA): “Technically the Barnett Shale; the company then spent Technically Recoverable Shale Oil Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries 20 years figuring out how to make the play com- Russia US Outside the United States,” Washington, DC: mercially viable. Success in the Barnett was fol- 22% 14% US Department of Energy EIA, June 2013. lowed by the deployment of new techniques and China technologies to find and produce natural gas and 10% then oil from other basins and formations across North America. Recent success in the Neuquén Argentina 8% basin of South American has the potential to Others 19% revolutionize the oil and gas industry in that Libya Canada region in a manner similar to that experienced in Australia 8% 3% Pakistan North America. 3% Mexico Venezuela 5% Argentina’s unconventional resource plays have 4% 4% been recognized by exploration companies for Figure 1. Global shale resources. Argentina has some time. The Vaca Muerta formation is consid- abundant reserves in unconventional reservoirs. Globally, the country is third in technically ered by many experts to have some of the greatest recoverable shale gas reserves (top) and fourth potential for hydrocarbon production in the world in technically recoverable shale oil (bottom). The (Figure 1). One independent study compared shale majority of Argentina’s unconventional reserves resource potential outside North America and are associated with formations in the Neuquén basin. (Adapted from the US EIA, reference 1.) ranked the Vaca Muerta formation third globally in technically recoverable gas and fourth in oil.1 26 Oilfield Review January 2016 27 Several operators are evaluating the Vaca date. The company established early on that the formation has reservoir-specific characteristics Muerta play; YPF, however, has been the most play has unique characteristics that affect devel- that differ from other shale plays comes as no active and successful in initiating production to opment programs. The fact that the Vaca Muerta surprise; operators of shale resource plays gener- ally agree that, to maximize production, each play must be approached and evaluated based on its own intrinsic merits. The Vaca Muerta Shale PERU possesses features that enhance its potential to BOLIVIA BRAZIL deliver financially viable volumes of hydrocarbons. To maximize production and reduce the development cycle of the play, engineers at YPF are now using fracture simulators, predictive Paraná basin numerical models and field-specific workflows PARAGUAY created from information derived during an extensive evaluation program. The process is helping them understand the effects of rock Chaco basin mechanics on fracture propagation during hydraulic stimulations. The information gained from their workflows and simulations is then used to optimize well spacing, fracture stimula- URUGUAY CHILEARGENTINA SOUTH AMERICA tion designs and fracture treatments. The methodology has helped the engineering team reduce Neuquén the development time of the play compared to basin the time taken by iterative approaches typically used in other shale developments. The methodology YPF has taken in developing San Jorge basin the Vaca Muerta formation is driven in part because the formation has a combination of factors that differentiates it from other plays: a high pore pressure, a complex stacking pattern of vary- Austral- ing lithologies and geomechanical complexity Magallanes Prospective basin arising from the close proximity of the Neuquén basin 0 500 1,000 km basin to the Andes Mountains. The engineers at 0 300 600 mi YPF have also found fracture gradients in some parts of the basin that are abnormally high, which Figure 2. Neuquén basin. Several basins in South America have potential as unconventional resource greatly impacts completion strategies. A thorough plays. The Neuquén basin, in west-central Argentina (red box), is the major source of oil and gas understanding of the Vaca Muerta formation’s production for the country and contains three deepwater marine shale deposits—the Agrio, Vaca Muerta and Los Molles formations. These shales act as source rocks for oil and gas deposits found in geomechanics and reservoir heterogeneity is cru- conventional reservoirs in the basin. cial for proper field development. With these many factors in mind, YPF has started to move 2. Hogg SL: “Geology and Hydrocarbon Potential of the Basin Dynamics. London: The Geological Society, Neuquén Basin,” Journal of Petroleum Geology 16, no. 4 Special Publication 252 (2005): 1–14. from a traditional, and often costly, trial-and-error (October 1993): 383–396. 8. Badessich MF and Berrios V: “Integrated Dynamic Flow methodology of developing resource plays to a 3. Instituto Argentino del Petróleo y del Gas, http://www. Analysis To Characterize an Unconventional Reservoir in model-and-optimize methodology. iapg.org.ar/suplemento/Agosto2015/Produccion%20 Argentina: The Loma La Lata Case,” paper SPE 156163, por%20cuenca.html (accessed October 30, 2015.) presented at the SPE Annual Technical Conference and This article provides a basic overview of the 4. Back-arc basins are geologic features associated with Exhibition, San Antonio, Texas, USA, October 8–10, 2012. Vaca Muerta formation and YPF’s work in the island arcs and subduction zones. Found at convergent 9. For more on geochemical characterization of source plate boundaries, they form when one tectonic plate rocks: McCarthy K, Rojas K, Niemann M, Palmowski D, play to date. The article also reviews workflows subducts beneath another, creating a trench. Subduction Peters K and Stankiewicz A: “Basic Petroleum devised by the YPF and Schlumberger teams and zones are frequently associated with formation of Geochemistry for Source Rock Evaluation,” volcanoes and seismically active areas. Oilfield Review 23, no. 2 (Summer 2011): 32–43. the simulation programs that are used to opti- 5. Hogg, reference 2. 10. Stinco L and Barredo S: “Vaca Muerta Formation: mize both drilling operations and stimulation 6. Garcia MN, Sorenson F, Bonapace JC, Motta F, Bajuk C An Example of Shale Heterogeneities Controlling treatments and briefly discusses current produc- and Stockman H: “Vaca Muerta Shale Reservoir Hydrocarbon’s Accumulations,” paper URTeC 1922563, Characterization and Description: The Starting Point presented at the Unconventional Resources Technology tion and future development plans. for Development of a Shale Play with Very Good Conference, Denver, August 25–27, 2014. Possibilities for a Successful Project,” paper Badessich and Berrios, reference 8. In the Shadow of the Andes SPE 168666/URTeC 1508336, presented at the 11. Ejofodomi EA, Cavazzoli G, Estrada JD and Peano J: Unconventional Resources Technology Conference, “Investigating the Critical Geological and Completion The Neuquén basin lies on the east flank of the Denver, August 12–14, 2013. Parameters that Impact Production Performance,” Andes Mountains in west-central Argentina 7. Howell JA, Schwarz E, Spalletti LA and Veiga GD: “The paper SPE 168709/URTeC 1576608, presented at the Neuquén Basin: An Overview,” in Veiga GD, Spalletti LA, Unconventional Resources Technology Conference, (Figure 2). Oil was first discovered there in Howell JA and Schwarz E (eds): The Neuquén Basin, Denver, August 12–14, 2013. 1918.2 The basin is a major source of oil and gas Argentina: A Case Study in Sequence Stratigraphy and 28 Oilfield Review production from conventional reservoirs—57% of Period Epoch Age Lithostratigraphy the natural gas and 40% of the total oil produc- Pircala Roca Jaguel formation tion within Argentina come from it.3 The target Maastrichtian formation formation areas for shale development in the basin are Late Loncoche formation

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