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Salta Province offers opportunities in 12 bid-blocks


Argentina’s Salta Province government presented to the Houston oil & gas community the Salta Province Bid Round 2018 offering 12 blocks for exploration and eventual development. An additional three blocks will also be tendered later this year.  A small group attended the event but among the companies were majors ExxonMobil and Chevron. Neither company has been involved in the area before signaling that Salta could become a hot area for exploration in South America. The offered areas to be included in the current launch are: 9790 sq km Algarrobal, 7,676 sq km Guayacan, 184 sq km Ipaguazu, 1,766 sq km Las Canitas, , 9,810 sq km Ojo de Agua, 4,052 sq km Pichanal, 1,176 sq km Pocoy, 7,232 sq km San Ignacio, 381 sq km San Telmo, 6,444 sq km Santa Rosa, 8,546 sq km Tolar Grande and 245 sq km Yariguarenda. The areas to be offered in July are 2,884 sq km San Carlos, 6.3 sq km Cuchuma and 2 sq km Lumbrera.

Salta bid blocks and licensed acreage

Salta bid blocks and licensed acreage

With more than 80 years of oil and gas activity, the northwestern province of Salta was for decades the second highest producer in Argentina but natural reservoir declines from long-term production and also low natural gas prices the absence of wellhead gas pricing policies have slowly led to Salta losing its position.


A recent analysis of daily production shows Salta production at about 5,000 bo/d and 233 MMcg/d from 65 wells. Total proven reserves were published in 2016 as 28.21 MMbo and 714.51 Bcfg. The main producing prospects and horizons in Salta are the Silurian-Devonian Huamampampa, Icla and Santa Rosa formations as well as interesting future possible shale prospects for the Los Monos Formation, seen previously as a source rock but where interesting results have been recorded on the Yacuy 1001 and Ramos 1004 wells. The San Telmo, Las Penas, Tarija, Tupambi and Cretaceous Yacoraite formations are among the recognized productive horizons and targets in the province and Paleozoic prospects are deep but hold high productive potential for both oil and natural gas. The top four producing fields in the province are Ramos, Acambuco, Aguarague and San Antonio Sur.

Icla fm type production curve

Yacoraite fm type curve

Since 2015 the provincial government has started an initiative to improve conditions for exploration and production in Salta.  A new law was invoked for a special promotional regime to stimulate investments, including tax exemptions on equipment acquisition and possible reductions in royalties, especially for high risk projects were addressed by the law. Provincial hydrocarbon data has been catalogued and organized to accommodate the exploratory plan of Salta created in 2016. The main objective was to make the data accessible to better identify, qualify and quantify resources to promote future investments in the province.  Detailed technical data on historical exploration wells, hundreds of seismic lines and additional is now accessible for potential bidders to analyze available blocks.

The most interesting areas to be offered in the upcoming round may be the ones with existing discoveries and possibly high potential. This includes the Guayacan, Ipaguazu, Yariguarenda and Las Canitas blocks. This blog will take a quick look at a couple of these.

Ipaguazu block

Ipaguazu block

This 183 sq km license It is in the prolific Tarija Basin, between the Campo Duran-Madrejones area currently operated by Tecpetrol, and the Santa Victoria block (Madalena Energy). Tecpetrol in 2017 presented an US$ 30 million investment plan for Sierra de Aguarague. The license was awarded in 1990 and the partners have since been granted a 10 year extension of the contract which now expires in 2025. Geological targets are the Carboniferous Tupambi Formation at depths of around 3,800m and the Devonian.

The Ipaguazu anticline is separated from the Madrejones by a deep syncline which leads to hydrodynamic pressures on both sides. The Tupambi Formation seems to draw the most geological interest in the area. Six wells have been drilled on the block with the most notable being the Ipaguazu x-1 which tested in 1981 about 918 bo/d and 10 MMcfg/d from the Tupambi Formation. The sweet spot is projected to be about 3,000m deep with the observation of paleo channels in available 2D seismic lines.

The Devonian play is represented by the Huamampampa and Santa Rosa formations. These formations were not reached by the Ipaguazu x-1 but the play has been highly productive in the neighboring Aguaragua, San Pedrito and Ramos fields.

Future exploration work like reprocessing 2D lines, surface geochemistry, additional seismic acquisition and new drilling plans are expected to be worthwhile exploration investments for the  block.

Yariguarenda block

Yariguarenda block

This block is also in the Tarija basin, close to Bolivia and adjacent to the west with the Acambuco I Block operated by Pan American Energy and to the east of Madalena Energy’s Santa Victoria Block.  Chinese operator, JHP operates south of this license with the Tartagal Oriental Block. Six wells have been drilled historically in this area with two of them being successful. The Nacatimbay x-1001 and the Tartagal Oriental x-1001 tested oil and gas from the Las Penas and Tupambi Mississipian sandstones. The approximate depth of the objectives was 3,800m. The Nacatimbay well was drilled in the southern portion of the structural alignment of the Campo Duran, Madrejones and Icua fields. The Nacatimbay x-1001 tested gas and condensate in 1995 with a TD of 4,159m. The southern part of the area structures shows emergent faults from the Los Monos Formation (source rock and potential unconventional target).

The exploration challenges include assessing the Devonian Huamampampa and Santa Rosa formations, which produce oil and gas in neighboring Madrejones and Campo Duran.

The Tertiary Complejo Petrolifero Rio Pescado is also an interesting target to investigate, as well as the Carboniferous San Telmo Formation.

The expected work programs in Yariguarenda includes reprocessing existing 2D seismic, perform surface geochemistry and acquisition of some new 3D seismic to delineate the Tupambi reservoir in the southern area of the block. Deeper structural assessment and additional drilling is also expected if justified by these studies.


General exploration overview


Although there are some discoveries with interesting results, the Salta bidding blocks require extensive and intensive additional exploration work to determine profitability of oil and gas development. Further analysis is needed of existing technical information to use for exploration of deeper horizons also. The Tarija and Oran-Olmedo Basin in Argentina need further exploration and analysis of the petroleum systems and play definition in order to better identify possible sweet spots. The gas window, especially in the Carboniferous and Devonian plays is a great opportunity to invest in these blocks.

Additionally, the Los Monos Formation in its sandstone facies has been mentioned as an interesting unconventional tight gas play especially for the Aguarague-Ramos anticline. Porosity is low but gas saturation very high in its psamitic intercalations. The Salta province prospects in the Tarija basin are very linked to Bolivia gas fields in that basin with the reasonable hopes that some of the high producing wells and multi-Tcf fields can also be found on the Argentine sine of the border in Salta.

However, drilling and operating costs in Salta are currently higher than those in Neuquen for example due to more difficult drilling conditions, as well as the deeper objectives averaging between 3,800-4,200m and lack of economies of scale that now exist in Neuquen. The higher costs can be compensated by much higher volumes per well though especially with natural gas.

Improvements in government pricing and tax policy to promote industry activity in recent years, like an agreement being discussed with the Federal Government to apply to Salta the special gas pricing promotion plan now active for the Neuquen and Austral basin could provide the missing piece to help to revive the Salta Province to reach its full potential in hydrocarbons.

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