Wintershall Dea to focus on gas and exit oil projects in Brazil and Argentina

Germany's Wintershall Dea said through several announcements on Monday that they are shaking up their South America operations to focus on gas and exit oil projects in Brazil and Argentina.

Wintershall Dea said that they have decided to terminate all their oil operations in Brazil and close the current office in Rio de Janeiro. They said in a statement that the "decision is the result of a very thorough analysis of our global portfolio and evaluation of individual projects and how they fit with our long-term strategy."

In Brazil, Wintershall Dea holds to date participating interests in a total of nine exploration licenses, spread over Potiguar, Ceará, Campos and Santos basins, which were awarded to the company in bidding rounds in 2018 and 2019.

Moreover, the company has agreed to sell its shares in its shale oil blocks in Argentina and to instead focus natural gas production in the country.

As part of the deal, Wintershall Dea will sell its 50 percent interest including operatorship in the unconventional Aguada Federal and Bandurria Norte blocks in the Argentine province of Neuquén to Vista. The transaction is retroactive to January 01, 2022.

"Argentina is and remains an important core country for Wintershall Dea's gas production in our global portfolio," Wieland explained. "With the sale of our interests in Aguada Federal and Bandurria Norte, we are focusing our activities in Argentina on gas production. Here we have a strong position in the country, with projects in Tierra del Fuego and Neuquén, that contribute significantly to Argentina’s energy supply," said Thilo Wieland, Member of the Wintershall Dea Board, responsible for the regions Russia, Latin America and Transportation.

Wintershall Dea's total production in Argentina is averaged 66,700 barrels of oil equivalent per day in the first nine months of 2021, 92 percent of which was natural gas. Argentina's share of the company's total global production was around 11 percent in the same period.

In Neuquén, Wintershall Dea is engaged in a continuous production drilling program in the dry gas Aguada Pichana Este block in the Neuquén basin, together with its partners TotalEnergies, YPF, and Pan American Energy. In Tierra del Fuego, Wintershall Dea is a partner in the "Cuenca Marina Austral 1" offshore concession, from whose fields about 16 percent of Argentina's natural gas is produced.

"We will focus on the further development of this important gas cluster in the south of the country, which offers a promising future project with Fenix," Thilo Wieland said. Fenix is an offshore gas field to be developed, located about 60 kilometers offshore Tierra del Fuego, northeast of the producing Vega Pleyade field.

Wintershall Dea, along with operator TotalEnergies and partner Pan American Energy is working to progress the Fenix development towards a final investment decision.

"With the project expected to deliver additional significant natural gas volumes for more than 15 years, we are reaffirming our long-term commitment to Argentina," Thilo Wieland added.