PRIVATIZATION OF STATE COMPANY CATALYZES ARGENTINE OIL INDUSTRY

The birth of YPF S.A. has captured the attention of politicians, bureaucrats, and others with vested interests in existing state-owned oil companies around the world. Its success could start the winds of change blowing in many directions.

So far, the venture is going splendidly, catalyzing not only efficiencies and progress in YPF S.A. but in the entire Argentine oil industry, most of which had previously existed only in a mutant form.

The road to privatization started on Jan. 1, 1991, when the government set a schedule for deregulating the oil and other industries. Joss A. Estenssoro, president and chief executive officer of YPF, who captained the state company's transformation, says that three important elements had to be in place to make the venture successful:

The reform of the state itself
The deregulation of the oil industry
Fairness.

Estenssoro says that the third element was the greatest challenge. To establish a vibrant oil industry in Argentina, domestic and international investors had to believe they were going to compete on a level playing field; that YPF would not take advantage of its size during the privatization process, when some of its assets were being sold, and that its objective would be that of a private-sector company.

Now, more than 1 1/2 years after the big moment, Oscar Secco, veteran Argentine oil industry executive, and former president of Amoco Argentina Oil Co., says privatization has had the same effect on Argentina as a "major find."

The industry there now operates, he says, no differently than the Canadian and U.S. oil industries.

"Five years ago," he said, "the game was being played in the YPF offices in Buenos Aires. It was never ending negotiations. The prices of oil and gas had nothing to do with the international prices. Our best engineers and lawyers were devoted to negotiating.

"Now we have to learn the marketing part, learn that oils are not the same value, and learn how to sell them. But now we have our best engineers out in the field or in our own offices, handling the technical work, and addressing the sticky questions on economics and planning."

Marcelo Guiscardo, YPF's vice-president of exploration and production, sees an important secondary development as Buenos Aires loses its lock on oil industry decision making. He knows of at least one major service company entering the Argentine market that will set up its headquarters outside Buenos Aires, near areas of oil and gas activities. This wasn't done in the old days, but he believes it may become a trend.

PRIVATIZED?

English-language financial jargon seems to be inadequate when the word "privatized" is used to describe the sale of part of a state-owned enterprise to anyone who can come up with the price of a share of the stock. "Going public" seems to be a better description of the process, which generally opens a state company to more scrutiny than it ever got from its political overseers.

But whichever way one looks at it, the action taken in Argentina is irreversible. YPF, since the privatization schedule was set in 1991, has sold $2 billion of its $6 billion in assets and reduced the number of its employees from 52,000 to 5,800.

It should be noted, however, that the old YPF was doing things that modern oil companies no longer do. It even had supermarket employees on the payroll. It owned and operated fleets of drilling and workover rigs, trucks, and ran its own seismic surveys; doing in fact just about anything necessary to conduct exploration and production. Service-type operations such as these, plus the company's air fleet, were sold to employees under favorable conditions. Over 130 new companies were created out of the upstream activities. Although the contraction no doubt caused personal hardships among some employees, not all were put out on the streets.

The survivors plus newcomers are now going through a corporate cultural change. YPF president Estenssoro, at one time president of Hughes Tool Co., is pushing to introduce the latest in international technology and experience. English, he believes, is the main avenue to this and he stresses its study and use at all levels, from the executive suite to the refinery control room. Some executives and technical staff are even sent for total immersion courses in the U.S.

Advanced technical studies at the University of Texas at Austin are also part of the program. Eleven petroleum engineers and geologists enrolled there are now engaged in intensive study in specific disciplines.

In the downstream sector, a team from Chevron Co. U.S.A. is working for YPF at the La Plata refinery and sharing its expertise in maintenance and process technology (see related article, p. 54).

ARGENTINE UPSTREAM

Argentina is amply endowed with sedimentary basins, totaling 700,000 sq miles. Seventeen are onshore; three offshore. Six of the onshore basins extend offshore.

The only productive ones to date are the Noroeste (Northwest), Cuyana, Neuquen, San Jorge, and Austral basins (Fig. 1) (79084 bytes). The Neuquen basin is the biggest oil producer with production running recently in the range of 320,000 b/d. The San Jorge basin is second with output of some 210,000 b/d.

Here are how the basins (Table 1) (15201 bytes) stack up in developed and undeveloped reserves (in millions of barrels of oil and billions of cubic feet of natural gas, respectively) as of January 1994:

Neuquen-885; 11,100
Golfo San Jorge-917; 400
Cuyana-221; 40
Noroeste-122; 4,400
Austral-164; 2,300.

YPF OUTLOOK

Although YPF doesn't run the oil industry anymore, Argentina still looks to the company, perhaps temporarily, for some guidance and expertise. YPF's Estenssoro points out there are still frontier areas in these productive basins and says that 3.2 billion bbl of oil and 18.5 trillion cu ft of gas could be discovered in them over the next 10 years.

He defines a frontier area as one that is unexplored, under explored or in its initial stage of exploration. Here are his assessments of the productive basins and their exploration maturity:

San Jorge 32 million acres, 74% frontier. Breaking this down, 65% of the onshore portion and 100% of the offshore portion should be considered as frontier area.
Neuquen-30.8 million acres, 51 % frontier. One of the most exciting aspects of this basin is a folded belt along the Andes, similar to the U.S. Rocky Mountain Overthrust Belt. This new geological finding continues north to the Cuyana and Northwest basin, according to Estenssoro, and south to the Austral basin. Proven but not yet developed gas reserves from this basin are being committed to a 520 mile long gas transmission line to take 300 million cu ft/day to Chile. The project, which would be backed by YPF, Bridas, Pluspetrol, and San Jorge plus Chilean partners, is said to be at the political decision level. It could be in operation by 1998.

Given potential production, future demand, and the present infrastructure, Estenssoro says a new oil pipeline of 150,000 to 230,000 b/d will have to be built to the Atlantic from this basin during the next 4 years.

Cuyana-14 million acres, 20% frontier
Northwest-37 million acres, 80% frontier. Oil and gas are produced from three superimposed basins from the Devonian, Carboniferous, and Cretaceous eras.

Estenssoro says YPF expects three giant gas and condensate fields to be discovered in the Devonian. These fields will provide 275 million bbl of condensate and 8.5 tcf gas. The Carboniferous would probably provide 1 tcf and 50 million bbl of condensate; the Cretaceous 1 tcf gas and 175 million bbl of condensate. The grand total could be 10.5 tcf gas and 500 million bbl of condensate.

Australia's Ampolex Ltd. as operator, with YPF, Brazil's Petroleo Brasileiro SA (Petrobras), and three other participants, spudded last March the first deep exploratory well on the Aguarague gas field in this basin.

This well is in an inhospitable region with heavy rainfall, steep hills, flooding, and rivers that change course. The drilling rig was brought in by helicopter. On top of this, well completions have proven to be very difficult. The 18,000 ft test is aimed at the Santa Rosa formation in the Devonian. That depth is a first for this region, where $80 million will be spent in this exploration program.

The stakes are high. This is the first of the wells that will be needed to prove the 9 tcf of gas reserves that would make it economically feasible to build a 1,700 mile pipeline of 36-in. to 42-in. diameter to move 1 to 1.2 billion cu ft/day to northern Argentina and Sao Paulo, Brazil, one of the world's largest cities.

Austral-34 million acres, 78% frontier. This southernmost basin extends into Chile and offshore. A consortium of Total, Bridas, and Deminex reports a 5.3 tcf gas resource offshore in the CAM-1 block. This large discovery will require a major investment to move the gas to market.

Putting all the prospects together, Estenssoro thinks that over the next 10 years Argentina should discover in all its basins a total of 4.5 billion bbl of oil and 19.5 tcf of gas. The investment required should run to the "magnitude" of $6 billion.

He says his projections over the next 10 years may seem optimistic to some, but they are realistic to him. Some major assumptions are that inflation will remain in check, that investment will be maintained at an average of 23% of gross domestic product (which will grow at 5% /year), investment will average $70 billion/year, and the demand for fuel will increase 6%/year. Another important element is that the price of crude for West Texas Intermediate will be $21.00/bbl during the period.

OFFSHORE

Argentina has a huge offshore shelf area, much larger than the North Sea, that has been very sparsely explored. The shelf is relatively shallow and depths of only 200 m are found 200 to 300 miles offshore. Then the shelf falls off rapidly. Optimists believe reserves similar to Brazil's Campos basin may be found there

Interest still runs high in the Malvinas/Falklands area. Estenssoro says YPF and British Gas plc are looking for some kind of understanding between the Argentine and British governments. Both companies have presented their respective governments with letters indicating their desire to jointly explore the area.

However, he says that exploration done to date in the area is still "inconclusive."

YPF has been involved in an unsuccessful test of the San Julian basin, another virgin offshore area. Petrobras was the operator on the well, San Julian ES 1, which was spudded in October. It was drilled by the semisubmersible Diamond Nomad in 170 m of water. Target depth was 3,800 m, but drilling was stopped at a depth of 2,940 m last December.

Although Argentina has a vast unexplored offshore region, it is of course no certainty that major, economically exploitable reserves will be found.

Oscar Secco says more exploration is necessary. He thinks the most favorable play will be along the "Tallud." This is where the relatively shallow shelf drops off abruptly, from, for example, 150 m to 400 m. This is the type topography in which Brazil has found its prolific deepwater Campos fields. But, he says, no one at the moment can assert this success can be duplicated in Argentine waters.

Secco says oilmen cannot control two things: geology and the price of oil. Therefore, the future can no more be predicted in Argentina than in the U.S. or Canada.

But the oil industry in Argentina can improve its technology. The use of 3D seismic is still in its infancy there, and, horizontal drilling has yet to be fully exploited.

Last fall, Argentina was in a boom. There was not a single drilling rig, workover unit, or pulling rig out of work in the country, he says.

"All this," he said, "is to increase production. It may last 6 months, 12 months, or 4 years."

He sees more investment, but 50 to 60% of it will be in incremental projects, such as water floods, and stepouts to nearby structures.

A major plus point for Argentine oil men is government policies.

"We have," Secco says, "one of the best fiscal regimes in the world."

Although there are no giant oil fields, the oil industry can make a go of it, he says, because of the modest government take. But this is almost a necessity for the crude export market. Because the Argentineans must load their oil in relatively small ships, their export price is about $2.00/bbl under the world rate.

PRODUCTION

YPF holds about 46% of the oil reserves and 50% of the gas reserves in Argentina.

But Argentina has over 30 oil operators and over 100 participants in exploration and production, a surprising number given the infancy of the "free-enterprise" oil industry there. Many are family held and are what would be termed small independents in the United States. The reason is that in former years YPF actively promoted access by local companies as contractors. Now these former contractors have had years of experience and gotten to know their contract areas well, some of which they were able to buy.

A rule of thumb in Argentina is that YPF alone owns, produces, or sells from 40 to 50% of everything. It is by far the leading oil producer. Table 1 (15201 bytes) shows the rankings through October of 1994. One of the hottest producers is Petrolera San Jorge. It has increased production from 110,000 cu m (22,320 b/d) in January 1993 to 239,022 cu m (50,115 b/d) in September 1994, climbing from eighth to third largest producer.

Though Esso S.A.P.A., the Exxon Corp. affiliate, and Shell Cia. Argentina de Petroleo S.A. have major refineries in Argentina, neither has production. Shell is displaying some interest in looking for it, but Exxon seemed to be merely watching as 1994 closed.

In natural gas production, the Neuquen basin (Fig. 3) (85437 bytes) again leads the country. The Austral basin is in second place. Again, YPF is the leading producer, but Total Austral is a strong second, followed in order by Perez Companc, Bridas, and Pluspetrol S.A. Figs. 2a and 2b (79493 bytes) show that a solid increase in oil and natural gas production is taking place. In 1992, oil production amounted to 543,000 b/d compared to 571,000 b/d in 1993. In recent months, it has been running some 13% higher on a daily average than the same period in 1993.

YPF's Estenssoro attributes this gain to the sale of YPF's marginal fields, which has rejuvenated production, and to the opening of the trans Andean pipeline to Chile. When final totals are in, he expects Argentine oil production to have hit 710,000 b/d in December 1994; natural gas production 2.35 billion cu m/day.

The Argentine drilling pace is picking up dramatically. During 1994, YPF completed 862 wells, primarily oil wells, compared to 492 for 1993. And it drilled 1.6 million in of hole compared to 925,000 in 1993.

PRIME BASIN

The leading oil and gas production area in Argentina is by far the Neuquen basin (Fig. 3) (85437 bytes). Most of the 31 million acre basin lies primarily under the semiarid Patagonian province of Neuquen, which is nearly 1,000 km or some 600 miles southwest of Buenos Aires. This basin produces roughly half of Argentina's 625,000 b/d of oil (average first 6 mo of 1994) and nearly 40% of its natural gas. This amounted to some 80 billion cu in during the Southern Hemisphere's winter months this past June, July, and August.

The Province of Neuquen, whose western horizon is dominated by the snow capped Andes, is only about 250 miles by air from the Chilean shore of the vast Pacific basin, which is now receiving Argentinean oil via the recently completed trans Andean pipeline.

Not surprisingly, Neuquen Province is also YPF's production stronghold. The company has split its oil and gas producing operations into three tiers. At the top are the regional production departments: Mendoza, Comodoro Rivadavia, and Plaza Huincul. Under this level there are sectors, which are further classified as oil or natural gas production areas, depending on their primary activity.

YPF's production activities in Neuquen are under the regional production department designated Plaza Huincul after the village of Plaza Huincul. Although its surroundings suggest the Australian Outback, it is only about 50 miles west of the town of Neuquen, a city of over 25,000 inhabitants with daily air service to Buenos Aires and, given the aridness of the region, a surprising number of pear orchards and poplar trees.

The sectors under the Plaza Huincul department are Zona Central, Catriel, Loma de La Latta, and Rincon de los Sauces (translated, a corner of willows). For all practical purposes, Loma de La Latta and Rincon de los Sauces are the critical production foundations of the new YPF. This is a case where having most of your eggs in one basket is not risky.

For example, in June of 1994, Rincon de los Sauces produced 48% of YPF's production, or 20% of the country's total output of 658,000 b/d that month. However, Neuquen Province is not entirely YPF's fiefdom. Other operators produced 92,000 b/d there during the same period.

YPF's Loma de La Latta operation is the giant of the Argentine gas industry (Fig. 4) (82892 bytes). For comparison, the sector accounted for 93% of YPF's production last June and 40% of the country's total output of 81.4 million cu m/day or 2.9 bcf /day that month.

Fig. 3 (85437 bytes) shows the location of facilities in the Plaza Huincul department. Gas transmission lines do not appear on this map but they do in the accompanying Fig. 4 (82892 bytes), which focuses on Loma de La Latta. This sector along the Neuquen River is essentially surrounded by water as a result of river damming.

SHIPS AND PIPELINES

Argentina with an area of over 1 million sq miles is four times the size of Texas but has only some 33 million inhabitants. However, over a third of them live in metropolitan Buenos Aires. Crude oil, natural gas, and product pipelines are therefore with a few exceptions aimed from the north, south, and west at Buenos Aires. Ocean shipments of crude for domestic refining are also important in supply logistics. Important changes in ownership of these systems have occurred since the privatization of YPF.

OIL PIPELINE HUB

Puesto Hernandez in the Neuquen basin is the single most important location in the Argentine crude oil transportation network (Fig. 3) (85437 bytes) and (Table 2) (16506 bytes).

This is the starting point for Argentina's three crude oil pipelines: one going north to the Lujan de Cuyo refinery near Mendoza, one going over the Andes to Concepcion, Chile, and one going east to Puerto Rosales on the Atlantic.

The latter line is actually made up of discrete sections with different owners. But its tap root goes deep into the Neuquen basin and it is a major conduit for export crude and feed to Argentina's largest refinery. The section Puesto Hernandez/Medanitos/Allen taps a number of fields in the basin and is owned by YPF. Another tributary (Fig. 5) (78656 bytes) takes Neuquen crude via Centenario to the Plaza Huincul refinery. The refinery then sends the resid it produces, mixed with some gasoline and condensate to lower the viscosity, back along a parallel line to the Allen junction.

The 513 km (307 mile) section Allen/Puerto Rosales is called the Oldelval line, and consists of two parallel, 14-in. diameter lines. YPF owns 30% of the system; six other Argentine oil producers the remainder. The 25,000 b/d Isaura S.A. Bahia Blanca refinery and 18,000 b/d Esso Galvan refinery both tap into this line for their crude supplies just before it reaches Puerto Rosales, which for practical purposes is synonymous with Bahia Blanca.

At Puerto Rosales, most of the Oldelval oil enters the Puerto Rosales/La Plata line, which is wholly owned by YPF, for transport to the La Plata refinery.

Also at Puerto Rosales, crude tankered up from the Austral and Golfo San Jorge basins in the south is pumped ashore into the La Plata line.

This crude is brought in over the Punta Ciguena and Punta Ancia offshore crude oil buoys. The buoys are also used to export Medanitos crude. The incoming crude was loaded on ships at the Caleta Cordova and Caleta Olivia buoys offshore from the Comodoro Rivadavia producing area.

The loop between the refinery and Darsena de Inflamables (Combustibles Dock) and the two-way flow in the La Matanza section requires some explanation.

The 12-in line is for sending white products from the La Plata refinery to La Matanzas. It is also used for sending product from the Lujan de Cuyo refinery to Darsena de Inflamables. The 16-in. line to Darsena de Inflamables once carried fuel oil there and crude to YPF's small Dock Sud refinery, which has been sold to Destilerias Argentinas de Petroleo S.A. (Dapsa)

About 240,000 b/d of oil is produced in the southern provinces of Chubut, Santa Cruz, and Tierra del Fuego. There are no refineries in the sparsely populated region so all the production is shipped to Puerto Rosales for pipelining or export.

ANDES LINE

The third and newest line beginning in Puesto Hernandez is Oleoducto Transandino S.A. (Otasa). it began a new chapter for the Argentine oil industry, by opening the Pacific Rim to Argentine oil. The 106,000 b/d Otasa line began operation in February 1994 carrying Neuquen crude to Puerto San Vincente, Chile, a suburb of Concepcion. Chile's state company Empresa Nacional del Petroleo (ENAP) has a refinery nearby, but does not take all of the 106,000 b/d of oil being transported there in the 16-in. line. The excess crude is exported to other countries on the Pacific rim.

The line begins at an elevation of 650 m (2,132 ft) above sea level at Puesto Hernandez and rises to its maximum elevation of 1,943 m (6,392 ft) at the Buta Mallin pass. This is 202 km or 120 miles from the starting point and on the Chilean /Argentine border.

The system is automated and employs a supervisory control and data acquisition system that transmits data over fiber optics. There are two crude oil storage tanks at Puesto Hernandez of 125,800 bbl. Each receives production from the fields of YPF and other operators in the northeast of Neuquen province and the south of Mendoza province. There are four electric pump stations of 1,000 hp each to take the crude up the mountain range. Each has a pumping capacity of 800 cu m/hr.

The trans Andean line is operated by Otrasa in Argentina and Otrach in Chile. YPF owns 58% of it, ENAP, 12%, and a Brazilian bank, Inter Rio Holding Establishment, 30%.

CRUDES

Table 3 (19572 bytes) lists the most important Argentine crudes and gives some important characteristics. The crude oil names can be confusing because the crudes sometimes travel under the name of the province in which they are produced or that of a field or geographical place. The Neuguen Rio Negro crude in Table 3 (19572 bytes) is also known as Medanitos. In addition, Medanitos crude largely makes up the crude going to Chile. This blend is known as Rincon de los Sauces or Rincon Composite. Assays for both Medanitos and Rincon, which are quite similar, will be presented in a forthcoming article.

Canadon Seco is also known as Santa Cruz Norte after the province of Santa Cruz whose northern border lies just south of Comodoro Rivadavia.

Escalante is produced in the province of Chubut, also in the area of Comodoro Rivadavia. Both Escalante and Canadon Seco are exported to Europe and the U.S. Gulf coast. There are actually two Tierra del Fuego crudes, Santa Cruz and San Sebastian, both similar in quality to that shown in Table 3 (19572 bytes).

Santa Cruz is produced on the mainland north of the Strait of Magellan (Estrecho de Magallanes) and shipped from Puerto Loyola. The other is shipped from the port of San Sebastian on the Bay of the same name. The Mendoza crudes are refined at the Lujan de Cuyo refinery which is in the producing region.

A second pipeline from Puesto Hernandez supplies the Lujan de Cuyo refinery, 530 km (318 miles) to the north with 75,000 b/d of feed. It is 100% owned by YPF.

PRODUCT PIPELINES

Argentina's product pipeline systems essentially serve the heavily populated belt across the country's center (Fig. 5) (78656 bytes), (Table 2) (16506 bytes). The primary product line to serve the areas outside metropolitan Buenos Aires runs from the Lujan de Cuyo refinery east through Villa Mercedes to La Matanza or via Villa Mercedes through Monte-cristo to San Lorenzo, site of a former YPF refinery now called Refineria San Lorenzo or Refisan. It is owned by three companies, including Perez Companc, and has no conversion capacity. The line going south from Campo Duran also starts at a refinery, which exports naphtha, with no conversion capacity that YPF sold. The refinery has a gas processing plant and also puts LPG in the products line. It is now owned by Refinerias del Norte S.A. or Refiner. Given the concentration of product lines and distribution points in the middle of the country, tanker trucks and ships still play an important role in getting product to the far flung corners of Argentina

NATURAL GAS LINES

The existing natural gas trunkline system, which is summarized in Table 4 (20410 bytes), has also gone through the crucible of privatization. All this was formerly operated by state-owned Gas del Estado. Now it is divided between two groups (OGJ, Jan. 11, p. 28, 1993) into a northern and southern system.

Transportadora de Gas del Norte S.A. (TGN) is run by a group headed by Canada's Nova Corp., two Argentine companies, and a Malaysian company. The group owns 70%, the government the remainder. TGN's pipelines are the Norte line from the Northwest basin, which laps over into Bolivia, and the Centro Oeste (Central West) line from the Loma de La Latta facility in the Neuguen basin (Fig. 4) (82892 bytes). About 200 bcf /day of the 512 bcf /day of gas going through the Norte line comes from Bolivia.

Transportadora de Gas del Sur S.A. (TGS) is owned 70% by the U.S.'s Enron Corp. This system has two lines coming out of the Neuguen basin, Neuba I and Neuba 11. Neuba is a contraction for Neuguen/Buenos Aires. The TGS southern line starts at Ushuaia on the north shore of the Beagle Channel (Canal Beagle) in Tierra del Fuego. Called the San Martin line it taps Austral basin gas and takes it to Buenos Aires 3,580 km or 2,100 miles North.

More gas pipelines are a hot topic in Argentina. The most ambitious will be to build a 1,700 mile line ranging in diameter from 36 to 42 in. to carry Northwest basin gas to a huge market in Sao Paulo, Brazil. YPF with the Australian company Ampolex as operator in May 1994 spudded the first deep exploration well in the Aguiarague gas field. The target is to prove 9 trillion cu ft of gas reserves which would make the line to Sao Paulo economically feasible.

GAS LIQUIDS

TGS operates the General Cerri complex Argentina's largest gas processing facility, near Bahia Blanca. The plant can extract liquids for gas from any of the three TGS trunk lines, San Martin, Neuba 1, or Neuba 11. The facility includes a large cryogenic ethane unit with a nominal capacity of 18 million cu m/day and a smaller lean oil absorption unit with gas capacity of 5 million cu m/day. Current annual production is, in metric tons/year: Ethane, 330,000; propane, 250,000; butanes, 155,000; and natural gasoline 75,000.

This complex supplies Argentina's only large olefins plant, which is run by Petroquimica General Mosconi (PGM), with feed. PGM is still state owned but is on the sellers block and YPF is reportedly interested.

YPF has a turboexpander gas processing plant at its Loma de la Latta gas production complex that processes 6 million cu m/day of gas and extracts typically 850 cu m/day propane and butane and 400 cu m/day of a gasoline range material. This is from a dry gas produced there.

Low temperature separation units there treat large amounts of gas solely for gasoline removal. Including that from the turboexpander plant, gasoline output is more than 12,000 b/d.

Another major gas processing plant is the 5 million cu m/day San Sebastian plant in Tierra del Fuego. It is operated by Bridas and turns out 47,800 ton/year propane, 51,730 ton/year butanes, plus 5,600 ton/year gasoline.

Two plants, each with 1 million cu m/day throughput, are located at Canadon Seco in Santa Cruz Province and Centenario in Neuguen Province.

ARGENTINA DOWNSTREAM

Total refining capacity in Argentina is 635,000 b /d. YPF, Esso, and Shell are the three major refiners having, respectively, 325,000 b /d, 111,000 b /d, and 102,000 b/d of crude oil distillation capacity in six refineries. Except for Esso's Galvan refinery and YPF's 25,000 b/d Plaza Huincul refinery, which are simple hydroskimmers, the remaining plants of the big three have good conversion and hydrotreating capacity.

Table 5 (23374 bytes) shows refinery runs and product output for the top three refineries in September 1994. Total runs in 1993 for all refiners were, in cu m:

YPF-16.65 million (286,927 b/d)
Esso-4.46 million (76,858 b/d)
Dapsa-257,500 (4,437 b/d)
Shell-4.02 million (69,276 b/d)
Isaura-1.10 million (18,956 b/d)
Refinor-865,500 (14,915 b/d)
Refisan-1.02 million (17,578 b/d)

Three other smaller refiners - Isaura at Bahia Blanca, Refisan at San Lorenzo, and Refinor, in which YPF retains a 30% interest, at Campo DurAn-are all in the 30,000 b/d range for a total of 94,000 b/d. Only the Isaura unit has a fluid catalytic cracker; none have any other conversion or hydrotreating. Dapsa has some 3,000 b/d in two plants, neither with conversion capability.

The Argentine refineries serve a market of about 3.5 million vehicles, most of which seem to be taxis in Buenos Aires, burning about 115,000 b/d of gasoline. YPF has 47.5% of the market, Shell 22%, Esso 17%, and Isaura 9.3%. There are 100, compared to 400 in Europe, vehicles per 1,000 inhabitants. So there is a large potential for growth.

The country has cured its massive and disruptive inflation and is even running a budget surplus. Cars are no longer prohibitively expensive and new car sales are running half a million a year.