The two fields produced 4,368 barrels of oil daily in July 2026, with Cerro Fortunoso contributing 2,194 barrels and Valle del Río Grande 2,174 barrels. Water cuts reach 87.4 percent in Cerro Fortunoso and 94.6 percent in Valle del Río Grande, meaning the fields produce more than seven barrels of water per barrel of oil in the first case and over 17 barrels in the second. Managing this water constitutes a primary operational cost in mature field economics.
The investment program allocates US$91 million in firm commitments, split as US$58.85 million for Valle del Río Grande and US$32.15 million for Cerro Fortunoso. An additional US$59 million in contingent spending brings the total to US$150 million. The work scope includes reactivating inactive wells, workover interventions, converting producing wells to injectors, polymer flooding for enhanced recovery, and surface facility upgrades.
Venoil president and CEO Gustavo Naves confirmed the company will spend 2027 conducting reservoir studies and designing the drilling program, with the first new wells spudding in 2028. The plan targets at least 30 wells in the initial years. Neither field has seen new drilling in over six years, a period during which YPF maintained production without adding perforations.
The polymer flooding project will require installing a dedicated injection plant to mix polymers into water used for secondary recovery. The polymers increase water viscosity, improving sweep efficiency in reservoirs where conventional waterflooding channels through high-permeability zones and bypasses remaining oil.
The acquisition elevates Venoil’s operated production in Mendoza to 5,583 barrels daily, representing 11.6 percent of the province’s 48,251 barrels in July. The company’s workforce will expand from 340 employees to over 800 with the Malargüe operations integrated. Venoil disclosed a broader Argentina investment program totaling US$229 million, with US$206 million allocated to Mendoza assets and US$23 million to Santa Cruz operations.
YPF’s operated crude production in Mendoza drops from 16,883 to 12,515 barrels daily with the transfer. The Plan Andes divestment strategy aims to free capital and management bandwidth for unconventional development in the Vaca Muerta and Neuquén basins.
This article was curated and published as part of our South American energy market coverage.
