Argentina deepwater oil drilling plan sparks backlash

Argentina's oil industry is defending frontier deepwater exploration from an environmental backlash after the government authorized Norway's Equinor to carry out seismic studies in three offshore blocks.

Hundreds of people gathered in the coastal city of Mar del Plata and other cities around the country yesterday to protest the government's 30 December authorization.

Mar del Plata's mayor, Guillermo Montenegro, questioned the decision and has vowed to go to court to block the seismic work. The Buenos Aires province city is a hotspot for local tourism.

On 30 December the government cleared Equinor to shoot seismic on offshore blocks CAN_100 and CAN_108, located 307km (190.8mi) off Mar del Plata, and CAN_114, located 443km from the coastal city.

Operator Equinor holds a 35pc stake in CAN_100. Argentina's state-controlled YPF has 35pc and Shell 30pc. CAN_114 is split 50:50 between Equinor and YPF while Equinor holds 100pc of CAN_108.

Equinor obtained the stakes in the three blocks - located in the North Argentina basin - in a 2019 tender that awarded a total of 18 offshore blocks to 13 companies. The tender was designed to encourage exploration in a part of the country that has long been overlooked because of high costs.

"This is a fundamental step to put into value the hydrocarbon resources within the Argentinian seabed, and with it, reaffirming sovereignty over our maritime territory," energy secretary Dario Martinez said.

Amid the opposition from environmentalists and other sectors, the Argentinian Oil and Gas Institute (IAPG), which is made up of oil companies including Equinor's local subsidiary, defended offshore activity, emphasizing that it has been underway for decades.

Around 17pc of the natural gas that Argentina currently produces comes from 36 offshore wells in the Austral basin. All but one of those wells are in shallow waters of less than 100m (328ft).

A total of 187 offshore wells have been drilled in Argentina since the 1930s, IAPG said.

"There is currently an unprecedented assault against hydrocarbons that currently represent half of the global energy consumption," IAPG said.

Equinor, which entered Argentina in 2017, was not immediately available to comment.

The firm has stakes in eight offshore blocks in Argentina, six of which it operates. It recently relinquished two blocks it operated in Argentina's Vaca Muerta shale play as part of a strategy to focus offshore and leave operation of unconventional areas to local partners.

Equinor still holds non-operating stakes in two Vaca Muerta blocks operated by YPF: Bandurria Sur and Bajo del Toro.

By Daniel Politi