Oil And Gas
Dacon Oil and Gas Company has more than 6,000 kilometres of pipelines and flowlines, 87 flowstations, 8 gas plants and more than 1,000 producing wells. The company employs more than 4,500 people directly of whom 95 per cent are Foreign expatriates. Another 28,400 people are employed indirectly through the network of companies that provide supplies and services.
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The Dacon Oil and Gas Company is the pioneer and leader of the petroleum industry in Canada and Argentina. It has the largest acreage in the country from which it produces some 12 per cent of the Nation's oil.
Dacon operations are focused on oil and gas exploration and production (conventional and unconventional shale oil and gas) in Argentina and Canada.
Argentina is taking steps to rebuild its oil and natural gas production after a year of decline, but if it wants to make Vaca Muerta, one of the world's largest shale plays, a global exporter, Latin America's third-largest economy must create the conditions to attract investment.
President Alberto Fernández appears to be taking a shot at this. In his first year in office, he suspended the 8% tax on oil exports, temporarily propped up crude prices, and introduced an incentives program for boosting gas output. His energy team is now working on legislation to provide tax stability and loosen restrictions on accessing foreign currencies and moving money in and out of the country.
The goal, his team has said, is to rebuild confidence in the business, which has dimmed since a worsening financial crisis now in its third year deepened capital and price controls from August 2019 and led to tight controls on accessing dollars to finance investments and pay debts.
Will the measures turn around a slump in production?
José Luis Sureda, an oil industry veteran and former national secretary of hydrocarbon resources, is optimistic that they will in the short term.
The prospects for oil are brightest, he said. While profit margins are expected to be tight if Brent, the international reference price followed in Argentina, remains at around $45/b as is expected, there is pipeline capacity to return output to the pre-pandemic level of 520,000 b/d from 474,000 b/d in October and increase that to 600,000 b/d, Sureda said. With local demand averaging 500,000 b/d, he said that would build a surplus to increase exports to around 100,000 b/d using existing infrastructure.
Argentina's oil production has fallen from roughly 777,000 b/d in 2001, according to S&P Global Platts Analytics, which expects output to remain somewhat flat over the next five years before nearing 900,000 b/d by 2040.
Gas is poised for growth, too. A new 2020-24 gas incentives program should boost output by addressing several impediments to investment, chiefly by allowing producers to skirt tight restrictions on buying dollars — $200 per month for individuals, and little for companies to import or pay foreign debts.
The program also will pay producers a subsidy to increase prices to around $3.50/MMBtu — the breakeven price in Vaca Muerta — from a current market price of $2/MMBtu.
There is a lot of production to recover. A plunge in gas demand during a March to November lockdown of the economy for the COVID-19 pandemic created an oversupply, forcing producers to reduce prices to make sales. The result is that output fell 7.7% to an average of 125.3 million cu m/d in the first nine months of 2020 from 135.7 million a year earlier, according to the Argentina Oil and Gas Institute, an industry group.
Sureda said that while gas output will rise over the next few years, the long-term prospects are uncertain.
"If there are no solid signs about what will come after the four-year gas plan, then investments will fall again in the third year," he said.
This uncertainty is holding investment back in Vaca Muerta, leading to calls for better conditions at a time when low oil prices and the transition to cleaner energy are making companies more selective about where they allocate capital, said Guido Cerini, vice chairman of Latin America at Credit Suisse, an investment bank.
"Investment will go into the best countries and the best projects," he said at a Dec. 3 talk hosted by the Institute of the Americas.
For Argentina to compete for capital against Brazil and Guyana, the other large oil resources in the region, Eric Dunning, managing director of Chevron in Latin America, said at the event that Argentina must provide a stable, predictable and transparent regulatory and tax environment, market-based pricing, access to foreign exchange markets, the ability to repatriate cash to pay loans and dividends, and automatic and transparent rules for oil exports.
"With the right investment climate, we believe Vaca Muerta could double Argentina's crude oil production in a few years and generate crude oil exports of half a million barrels per day," Dunning said.
A focus on efficiency
YPF, the country's state-backed energy company and biggest oil producer, is taking steps to grow production by cutting costs so it can drill and complete 20% more wells with the same investment.
"We are aiming for breakevens of less than $30/b," said Pablo Iuliano, YPF's vice president of unconventional upstream at YPF. This would, he said, allow it to develop Vaca Muerta and export supplies at a profit in a future of prices of around $45/b.
José Luis Manzano, chairman of Integra Capital, an investment fund with interests in Vaca Muerta, said Argentina faces no choice but to improve its investment conditions to bring down financing and operating costs if it wants Vaca Muerta to be developed.
Dacon Oil and Gas Company today
Together with its Joint Venture Partners, Dacon Oil and Gas Company is capable of producing some 1 million barrels of oil per day on an average. Through its community investment programme, SPDC is demonstrating its commitment to improving the quality of life for all those who live and work in the Canada.
We use proven and innovative technologies to safely and responsibly access and produce oil and natural gas in a wide range of different geologic settings
We leverage technologies where they can create the most value for our operations and allow us to operate with great stability and enable us to optimize production
Our corporate strategy addresses the fundamentals that we must have in place to manage our risks and help us deliver our strategy and a significant valuable spin-off for our investors.
Worldwide Delivery. Product Support. Engineering & Production. Fast Responding 24/7. Dacon Oil and Gas Company and manufactures a full range equipment.
The oil and gas industry, potentially one of the most hazardous industry sectors in the United States, has one of the most thorough safety programs. The combination of powerful equipment, flammable chemicals and processes that are under high pressure can lead to hazardous and even deadly incidents.
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During the evolution of petroleum engineering, a number of areas of specialization developed: drilling engineering, production engineering and surface facilities engineering, reservoir engineering, and petrophysical engineering.