Proactive Investors - Run By Investors For Investors

Argentina the best bet to replicate US shale gas revolution, Morgan Stanley says

Argentina the best bet to replicate US shale gas revolution, Morgan Stanley says

Lots of countries are trying to replicate the US shale gas revolution and Morgan Stanley reckons Argentina has the best shot at doing so.

The US banking giant’s view is that Argentina’s Vaca Muerta shows the most promise. It is a high-quality liquid-rich shale that is comparable to the Eagle Ford asset in the US.

Morgan Stanley said the region has manageable logistics, which keep the costs reasonable, and a supportive, motivated government.

“Despite the challenging macro-political situation of the country, the attractiveness of below-ground fundamentals has been enough to spark a wave of investments in the shale story. While this has been led by state-controlled company YPF, renowned international players are also involved,” the broker notes.

Rubbing shoulders with the big names in the Vaca Muerta is Andes Energia (LON:AEN), the only AIM-listed firm with acreage in the shale prospect.

More than half of the shale oil outside the US is concentrated in Russia, China, Argentina, and Libya, while more than half of the non-US shale gas is concentrated in five countries: China, Argentina, Algeria, Canada, and Mexico.

Morgan Stanley says Russia has the largest opportunity to replicate the US shale revolution, but a number of obstacles stand in its way, such as access to the required technology, plus the recent sanctions against the country in the wake of the dispute in Ukraine.

Argentina, meanwhile, has become the second country following the US to have achieved commercial-scale shale production, driven by a number of government incentives to encourage investment in the oil & gas industry.

“We are confident that this new wave will be sustained for a long period, given that eliminating the current energy deficit will likely take close to a decade. Therefore, we think that risks of the implementation of stricter price controls with the ramp-up of shale production are relatively low,” Morgan Stanley said.

View full PGR profile View Profile

Phoenix Global Resources PLC Timeline

Related Articles

January 17 2019
An independent evaluation confirming the potential of the Ortoire block is a “significant milestone”, according to analysts at SP Angel
oil well
May 02 2019
US Oil & Gas has submitted an application to frack the Eblana-3 well along with a hydrogeology report.
Gas plant
April 29 2019
“2018 was a tough year for the company but we ended the year on a high."

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use