CAPITAL: Buenos Aires

MONETARY UNIT: Peso

REFINING CAPACITY: 666,505 b/cd

OIL PRODUCTION: 835,000 b/d

OIL RESERVES: 2.6 billion bbl

GAS RESERVES: 24.3 tcf

Effects of Argentina`s mid-1993 privatization continued to unfold in 1997.

In one large development, Amoco Argentina and Bridas Corp. merged most of their South American assets. Interests are Amoco 60% and Bridas 40% in a combined firm operating in Argentina, Bolivia, Brazil, Chile, Paraguay, Peru, and Uruguay. As part of the deal, Bridas acquired a minority interest in Amoco Bolivia, which owns 50% of Empresa Petrolera Chaco SA.

The deal created Argentina`s second largest oil and gas producer after YPF. It included production of more than 140,000 b/d of oil equivalent and 1.5 billion boe of reserves, about half of which are proved.

Another large item was Repsol`s 1996 acquisition of a controlling 37.7% stake in Astra SA of Argentina. Repsol hoped to benefit from Astra`s control of reserves of about 200 million boe and its 10.5% stake in Refinor SA, one of the country`s major refineries.

Upstream developments

GAS fields in Argentina`s Northwest basin were primed to supply gas to a 300 MMcfd pipeline serving cities and industries in northern Chile. Pipelaying from near Ramos to a power plant under construction at Mejillones, north of Antofagasta, began in late 1997. The pipeline operator, Gasoducto Atacama Cia. Ltda., secured contracts for 160 MMcfd of gas. Northwest basin fields are also within reach of supplying gas to a large diameter pipeline under construction from Bolivia to Brazil.

The Cuyo basin is the origination point for the 288 mile, 24 in. GasAndes pipeline to Chile. The line starts at La Mora, southeast of Mendoza, and terminates at Santiago. Throughput was to be 194 MMcfd by yearend 1997, 212 MMcfd by 2000, and 671 MMcfd by 2016.

Anderson Exploration Ltd., Calgary, had minor interests in the Cuyo and Neuquen basins as a result of its mid-1995 acquisition of Home Oil Co. Ltd. The 1997 work was designed to maintain production at 1996`s average of about 1,537 b/d of oil.

Neuquen remained Argentina`s busiest basin in 1997, and it seemed slated to get even busier in 1998. Neuquen fields were to provide gas for a pipeline planned from Plaza Huincul, Argentina, to Concepcion and Talcahuano, Chile.

Another point of Repsol`s interest in Astra was a recent acquisition that boosted Astra`s stake in Mexpetrol Argentina SA to 65.5%. YPF controls the rest. Mexpetrol Argentina operates El Porton/Buta Ranquil field, which produces 24,500 b/d in the Neuquen basin. The company`s oil and gas reserves are estimated at 41.4 million bbl and 138 bcf.

Pioneer Natural Resources Co., Dallas, completed acquisition of Chauvco Resources Ltd., Calgary, for $1.3 billion (Canadian). Pioneer budgeted $100 million (U.S.) to develop Chauvco properties in Argentina, mainly in the Neuquen basin and Tierra del Fuego.

Unocal and YPF agreed to explore and develop CGSJM Blocks 1 and 2, which cover 7,500 sq miles and include the offshore extension of the San Jorge basin.

First drilling offshore north of the Falkland Islands (Malvinas) was expected to start in 1998.

Argentina had 53-59 rigs working during 1997, making it second only to Venezuela in the Latin American rig count. Almost all Argentine drilling is on land.

Processing activity

Petroleo Brasileiro SA, YPF SA, and Dow Chemical Co. launched a major gas processing/gas liquids utilization project in Argentina and Brazil. It calls for total utilization of NGL being produced in the Neuquen basin. The companies began work in 1997 and were to spend $630 million during 3 years.

They planned to build a 1.26 bcfd gas processing plant at Loma la Lata, Argentina, to recover ethane, propane, butane, and natural gasoline from Neuquen basin gas. These NGLs will be transported via a 600 km pipeline to a fractionation plant to be built at Bahia Blanca, Argentina. Ethane is to be sold to Dow`s Bahia Blanca petrochemical complex. Brazil will import the gasoline and propane-butane mix.

The processing plant was to guarantee supply of 516,000 metric tons/year of ethane for the Bahia Blanca complex and 615,000 tons/year of LPG and 188,000 tons/year of natural gasoline for Brazil.

Transportadora de Gas del Sur SA was boosting capacity of its Cerri cryogenic complex at Bahia Blanca to 1.4 bcfd from 776 MMcfd. Future ethane recovery capacity was to be 1,900 metric tons/day. Three large gas pipelines converge at Bahia Blanca. The project also increased LPG production and storage capacity.

Petrobras and YPF agreed to form a joint venture to market petroleum products in Brazil and Argentina, and Repsol was looking to restructure and concentrate Astra`s energy activities.

Transportation

GAS pipelines were proposed from Argentina`s existing systems north of Buenos Aires to serve new markets in Montevideo and Paysandu, Uruguay, and Uruguayana in southwesternmost Brazil.

Gaz de France and partners were to spend $150 million to develop a gas distribution network for the northeastern Argentina provinces of Entre Rios, Misiones, Corrientes, Chaco, and Formosa. The project involves laying 3,000 km of distribution lines in 36 towns, which offer a potential customer base of 150,000-200,000, by 2010.