Most of our hydrocarbon production and reserves are currently concentrated in the Austral basin. The Austral basin is located in the extreme south of South America, and partially covers the Argentine provinces of Santa Cruz and Tierra del Fuego, the Magellan Strait and the southwest region in Chile. The Austral basin is comprised of approximately 230,000 km2, 85% of which are located in Argentina.
Conventional natural gas production in the Argentine portion of the basin comes mainly from marine/deltaic and fluvial sandstones from the Early Cretaceous Springhill formation at 2,000/3,000 mbgl. The basin has also a conventional secondary marine reservoir in the Tertiary Magallanes formation at 1,800 mbgl.
The Austral basin has approximately 90,000 km2 of mature source rock area, with exploration potential to be developed in the near future. These source rocks feed both the early Cretaceous Springhill formation as well as the Tertiary Magallanes formation. The main source rocks in the basin are the Lower Cretaceous, the Lower Inoceramus and the Aptian-Albian Margas Verdes and the Tithonian-Aptian formations, which contain black organic-rich shales.
Our production and development activities in Austral Basin are conducted pursuant to 26 production concessions and three exploration permits, which expire between 2026 and 2058 and represent more than 98% of our total production and our reserves base.
In January 2018, we extended our unconventional hydrocarbons production concession in the Campo Indio Este-El Cerrito block for an additional 35-year term, which represents 65% of our production.
We own interests in the Aguaragüe block in the Northwestern basin for a total of approximately 4,031 km2. To date, our joint arrangement partners have obtained 3D seismic data for 7% of Aguaragüe. The map below illustrates the geographic location of this block.
We own a 5.0% interest in the Aguaragüe block through a joint arrangement with YPF, Tecpetrol S.A., Petrobras Argentina and Ledesma S.A. Pursuant to the joint arrangement agreement, Tecpetrol S.A. conducts all of the operations in the block.
Exploitation concessions relating to this block is held by YPF. Concession expires in 2027. Under this exploitation concession, our joint arrangements currently pay to provincial authorities royalties on the sale price of oil and gas produced at wellhead.
On October 18th, 2019, CGC entered into a farm-out agreement with President Petroleum S.A., a wholly owned subsidiary of President Energy PLC (LSE: PPC). Under the terms of this agreement, CGC transferred 100% of its participation in the Angostura Block (including all assets, liabilities and commitments) from an effective date of November 1st, 2019.
On November 20th, 2019, the province of Rio Negro signed the decree approving the transaction. All rights and responsibilities of the exploration license were transferred to President Energy. CGC has no pending commitments nor responsibilities to fulfill regarding the Angostura Block.
Until October 2019, CGC owned an interest in the Angostura block in the Neuquen basin totaling approximately 694 km2, with 3D seismic data for 100% of the area. The map below illustrates the geographic location of the Angostura block. Infrastructure facilities in the area included oil treatment plants, gathering systems, batteries for collecting fluids at each field, and storage and delivery facilities.
In June 30, 2021, we acquired Sinopec Argentina Exploration and Production. With this, we increased our production by more than 50,000 Barrels of oil equivalent per day (boe), pushing its total production to a combination of 63% gas and 37% oil (previously 85% and 15% respectively).
Sinopec Argentina’s sites cover more than 4,600 km2, with a majority located in Cuenca del Golfo de San Jorge and in Cuenca Cuyana. Sinopec Argentina also has a stake in Termap, the operator of port terminals in Caleta Olivia (Santa Cruz) and Caleta Córdova (Chubut). Combined with Sinopec Argentina, the Company has substantially increased its oil production to more than 3,100 m3 per day (m3/d) and its gas production to 5,600 Mm3 per day (Mm3/d). Proven reserves will increase by a margin higher than 50% (from 59 MM boe to 90 MM boe).
We own several infrastructure facilities in the Austral basin, including oil and natural gas treatment plants, gathering systems, batteries for collecting fluids at each field, more than 1,300 km of interconnection pipelines to transport production to treatment, and storage and delivery facilities located near our Punta Loyola seaport, which allows us to easily access the oil market. Moreover, our installed infrastructure is scattered across many of the oil and gas fields we operate in the Austral basin, allowing us to leverage our existing infrastructure to produce oil and gas in new discoveries, including smaller discoveries, and rapidly capture their economic value.
In February 19, 2020, we inaugurated our “Sur Río Chico” underground gas storage facility, the second such facility in Argentina, which will allow us to inject approximately 1,000 Mm3/d of natural gas during the summer season and extract approximately 2,000 Mm3/d during the winter season.