Refineries operated at an average of 78.3% of capacity in May, the highest rate in seven months, the state statistics agency Indec reported Monday.The government of Neuquen, home to most of the country's shale resources, said in a statement that the increase was a direct result of the "takeoff of Vaca Muerta," a giant shale play.
Vaca Muerta is leading a recovery in the country's oil production, which rose 4.2% to 505,651 b/d in May from 485,165 b/da year earlier, according to the latest data from the Energy Secretariat. The play's output has been offsetting declines in conventional oil production, making it possible to reduce crude imports and now to step up run rates in refineries.
Indeed, Vaca Muerta's production growth has allowed the country to halt crude imports, which have not been made in more than a year, and to begin to export crude, Neuquen Governor Omar Gutierrez said in the statement.
The higher run rates should increase output of products, which has been subdued over the past year as an economic recession damps demand. Indeed, gasoline sales fell 3.7% to 151,147 b/d in May on the year, and diesel sales fell 1.1% to 230,032 b/d over the same period, Energy Secretariat data show.
So far, the oil sector has been focused on stepping up crude exports, which rose 30.1% to an average of 46,306 b/d in May on the year, not on exporting more products.
At the same time, certain products are being imported due to high demand or lack of refining capacity. Jet fuel imports nearly doubled to 2,007 b/d in May year on year, led by higher demand from a growing number of low-fare airlines, Energy Secretariat data show. Imports of ULSD rose 20.7% to 35,010 b/d over the same period, mostly because refineries are not producing enough of the higher grade product to meet demand. For the same reason, imports of 98 RON gasoline rose more than quadrupled to 11,504 b/d, the data show.
The biggest refiner is state-run YPF with a 55% share of diesel and gasoline sales. It is trailed by Shell-backed Raizen, BP-backed Pan American Energy and Trafigura.
The country has about 560,000 b/d of installed refining capacity, but demand generally runs between 450,000 b/ d and 500,000 b/d.