CEO OF PHOENIX GLOBAL RESOURCES PLC
Argentina 2017 I Energy I Interview
BIOGRAPHY With nearly 20 years’ experience in the oil and gas industry, he was appointed as non-board level CEO of Andes Energia in March 2017. Prior to this, he headed Mercuria EG’s investments in Argentina. He graduated in Electrical Engineering in India and has an MBA from Duke University, USA.
“OUR VISION IS TO BE A MAJOR PLAYER IN THE ARGENTINE SHALE REVOLUTION AND DELIVER SIGNIFICANT VALUE TO OUR SHAREHOLDERS ALONG THE WAY.”
CAN YOU TELL US MORE ABOUT PHOENIX GLOBAL RESOURCES?
Phoenix Global Resources is the only London listed company providing pure play exposure to the exciting Vaca Muerta shale and the growing economy of Argentina. The company offers the opportunity to invest in a new pro-business, pro-energy Argentina with significant upside in the form of exposure to the prolific Vaca Muerta shale. While we currently produce approximately 11,500 barrels of oil equivalent per day from our conventional acreage, about 1% of the national production, our net unconventional acreage represents about 6.5% of the Vaca Muerta, where we see significant prospective resources and therefore the most potential for growth.
HOW WILL THE NEW COMPANY BENEFIT FROM THE SCALE OF THE MERGER BETWEEN MERCURIA GROUP’S ARGENTINE E&P BUSINESS AND ANDES ENERGIA?
The reverse takeover process between Andes Energia and Petrolera El Trebol (PETSA) has meant that the combined group, now called Phoenix Global Resources, is a company with the scale to realise the massive potential of the Vaca Muerta in an improved business environment in Argentina. Phoenix is supported by a highly experienced and independent board focussed on delivery and with a proven operating capability. The board is chaired by Sir Michael Rake, Chairman of BT Group PLC and Worldpay who brings highly valuable experience and oversight. In practical terms, our scale and management provides us the platform to attract the right capital to invest in high growth and high impact opportunities in our portfolio consisting of both unconventional and conventional assets. We are ideally positioned to take advantage of this opportunity and are now aiming to accelerate our work programme to drive production and convert our conventional and unconventional resources into reserves and ultimately production.
WHAT IS YOUR VISION FOR THE DEVELOPMENT OF VACA MUERTA AND ITS IMPACT IN THE ARGENTINIAN ECONOMY?
The global oil & gas industry is still getting to grips with the full scale of the Vaca Muerta shale, but drilling data suggests that the potential for the shale could be massive. Currently, Argentina is the second biggest shale region in terms of contingent resources and production. YPF, the Argentinian national oil company, has recently announced that they intend to invest USD30 billion over the next 5 years to emulate the US shale boom. The Vaca Muerta is larger, significantly thicker and with a higher hydrocarbon content than the Eagleford and Marcellus shales, two of the key units responsible for the shale revolution in the United States. The potential of the Vaca Muerta was confirmed by the Loma Compana field, Neuquen Basin, which was drilled in 2010 and was the first productive field in the Vaca Muerta currently producing 40,000 barrels of oil equivalent per day according to YPF.
The development of any oil region has been accelerated by the arrival of oil and gas operators and service companies in an area. The Vaca Muerta has already attracted majors and supermajor oil and gas companies such as ExxonMobil, Shell, BP, Total, Chevron, Petronas, Statoil and, also, Schlumberger who in April this year announced that with YPF they intend to invest USD390 million into the Vaca Muerta to help supply drilling equipment. Schlumberger and other service companies’ direct involvement in the Vaca Muerta on the upstream side is a positive step and an indication of increased confidence in the commercial success of this vast resource play, especially given the experience that many of their crews have gained from the Permian basin and other Shale plays in North America. The next step, and probably the most important step in the commercial and successful development of the Vaca Muerta will be the involvement of independent E&P companies. It’s the independent E&P companies who cracked the code in the North American Shale plays and have been driving innovation, new technologies and improving industry best practices in general. Phoenix, as one of the very few independent E&P companies of size in Argentina, is looking to bring the right expertise and hopes to enjoy first mover advantage once many more independents start to emerge on the scene.
Another important consideration is the involvement of the Argentine government, who have been strong supporters of the development of the Vaca Muerta. The Government’s victory in the October mid-term elections can only be viewed as a positive for the development of the Vaca Muerta. The development of the Vaca Muerta’s effect on Argentina has yet to be fully demonstrated, but based on the growing excitement and proven potential of the basin, it could be a game-changer for Argentina who are attempting to turn away from being net importers of both oil and natural gas. Our vision is to be a major player in the Argentine shale revolution and deliver significant value to our shareholders along the way.