Argentina
Vaca Muerta: A journey to the heart of the oil´s Big Bang
Vista, Miguel Galuccio´s company, is located in the forefront of the exploitation of Vaca Muerta, the site that can change the history of Argentina.

The steel jaw painted red closes on the gleaming tube. The operators move away and start to turn with the maximum speed of a blender. It is brutal and at the same time there is a surgeon's precision in every movement. Like a tracheotomy to a giant. The tube penetrates the earth and links a metallic snake, a hellish worm that will eat the rock for thousands of meters until it finds the exact point to extract the fluid.

"Before, we use to do this with a lever on the floor, very rustic," explains Martin Lagos, field manager at Vista. We are in the control cabin of drilling rig. Medano de la Mora block. A mixture of lunar module and world crane. The pilot is surrounded by electronic screens, video monitors, panic buttons, giant clocks. It rotates on a helicopter chair and has a blue joystick in each hand. It is the heart of the RIG F-19 platform, which the multinational Nabors operates for the boutique oil company that Miguel Galuccio created a little over a year ago and is revolutionizing the way of working that immense mother rock known as Vaca Muerta.

Vaca Muerta is like the flagship of the Empire, only instead of floating on the planet, it is stationed 3,000 meters below the surface. A stone the size of Denmark that can change the destiny of Argentina forever. With the potential to generate the dollars that end with the external restriction, main reason of the cyclical macroeconomic imbalances of the country.

"A stone the size of Denmark that can change the destiny of Argentina forever. With the potential to generate the dollars that end with the external restriction, main reason of the cyclical macroeconomic imbalances of the country".

The Vista operation plans to generate 65 thousand barrels per day in three years. And it is a medium-sized company. With ten companies like this, foreign currency would already be produced for the same amount as the whole soybean complex, about 19 billion dollars per year. And we still do not count the giants that have already buried a foot in that desert, such as Chevron, Shell, Petronas, Total, Statoil, Exxonmobil and Wintershall, as well as the Argentinean Pan American Energy and Tecpetrol. The figures give vertigo. Vaca Muerta is another country. One that works. In Vista, they know that they are at the apex of a movement of historical transcendence, a crossroads of technological, economic change, that returns to Argentina a window of prosperity, as happened in the 1930s when it became the barn of the world.

Vaca Muerta: A journey to the heart of the oil´s Big Bang

"We are the next Argentine unicorn", people get excited at Vista´s offices. There is talk of an EBIDTA that could climb to 900 million dollars in just three years. Crazy.

Galuccio arrives at his incredible headquarters in Neuquén, facing the Limay River. There are no individual offices. Common spaces and meeting rooms. For a journalist it is a familiar environment: The newsroom. Only instead of writing notes they drill oil wells. But the effect is the same, flattens the hierarchies and the information is shared organically. It seeks to break the silos, the new fetish concept of corporate jargon.

Just off the plane, Galuccio supports the black leather backpack on the floor and starts a meeting that will last for hours. Managers, technicians, analysts, are being tested. He demands them to the maximum. Galuccio knows the business like nobody else. It is hard, but they admire it because it was made from below and it is at the frontier of the business. Vista is the Apple of Steve Jobs of Vaca Muerta. The place to learn and experiment.

"Galuccio believes that Argentina should do the same thing that the United States did: liberate the export of oil and force the companies that operate in Vaca Muerta to share their information. "This is how you learn faster," he explains.

Macri has to release the export of oil as Obama did in 2015 and triggered an economic prosperity that Trump enjoys today. The United States with a deposit similar to Vaca Muerta went from its historical dependence on the fluid to be on track to become the world's leading oil exporter, above Saudi Arabia. In addition, it should sign a decree obliging companies to share their geological and operational information. "This is how you learn faster," explains Galuccio, who should be the least interested in socializing the knowledge that Vista produces. But in Vaca Muerta everything acquires another dimension. If you work to export a commodity, the market is the world and partnering is the logical way to understand a monster that will take decades to put into value. Today between 2 and 3 percent of the rock is exploited. The investment is around 7 billion dollars and some studies indicate that the total operation of Vaca Muerta will demand almost two hundred times that figure.

Vaca Muerta: A journey to the heart of the oil´s Big Bang

The Orejano and Fortín del Aguila, are the first milestones in this story. Tecpetrol shot the gas production from the field with an impressive operation and, almost alone, managed to get Argentina to export again. But Macri dropped the subsidized price of Resolution 46 and lit a yellow light. At Vista, they know that gas is a business that is very tied to internal contingencies and focused on oil.

The Big Bang

Galuccio is Vaca Muerta. He assumed the leadership of YPF with the laser sight in that site that for many was another Argentine fantasy. He was able to convince Cristina Kirchner that there were few more important things in the country to pay attention to and he managed to sign the decree that enabled the first joint venture with the North American multinational Chevron, to begin to exploit the deposit. An extreme audacity for the story of that administration. And Dow came back, Petronas and many others. Today when you go through the gravel roads of that desert you can see the first condensation of that effort. More than thirty drilling rigs operating. In Eagle Ford and Permian, the twin fields of the United States, there are more than a thousand. Of that size is the growth potential.

"This city is going to change forever," says the US oilman as soon as it lands at the modest Neuquén airport. And it's happening. Cyan, the hotel that Vista uses for its staff, has full occupancy every day throughout the month. "They told us that the weekend and the holidays were going to fall, but it does not happen, we have been a hundred percent for several months," says the manager. The city begins to be populated by towers, for new executives and workers in an industry that pays well and in many cases in dollars. "I am grateful to my parents who decided to live here thirty years ago," says the driver from Buenos Aires, who proudly comments that he was able to buy a house for his family.

Vaca Muerta: A journey to the heart of the oil´s Big Bang

A decade ago just a daily flight connected this Patagonian capital with Buenos Aires. Today there are more than twelve and there are already direct routes to Córdoba and other points of the interior. The airline desktops are stacked on top of each other and almost do not paint the posters, as is the case with car rental companies. Everything is overflowing. Like the routes. Reaching Vaca Muerta is torture. Motorway sections, routes under repair, dusty roads. The infrastructure is not going to be -it is- the big bottleneck. And the regulation. Two Argentinean classics.

"We are lucky. Vaca Muerta is in the middle of an easily accessible desert, with no urban populations nearby. In the United States they have to drill in the neighbors' backyard"

But we are lucky. The formation is in the middle of a desert, with no urban populations nearby, on a flat land with easy access. In the United States they have to drill in the backyard of neighbors and in China, where the other large shale deposit is located, it is practically inaccessible. In addition, the Vaca Muerta oil is light, sweet, elegant. Top quality.

Vista´s model

The boy opens the air bottle and connects a balloon. A line of gray and white balloons. The blonde singer rehearses a cover. The girls are going to put on makeup. Vista celebrates its first year of life and have reasons to celebrate. In days the first results of the unconventional operation will be known. The contained euphoria is perceived. Like a secret that cannot stand.

Galuccio innovated from minute zero. The company was created with a SPAC, a novel financial vehicle that instrumented the stock market of Mexico, to finance projects without assets. If in two years the promised objectives are not met, the money is returned. It's basically a blank check. It raised 800 million dollars to finance a company that did not exist. He had the idea of creating the most important independent oil company in the region. And the accumulated prestige of its management in YPF and Schlumberger, the largest operator of oil services in the world. They believed him.

Vaca Muerta: A journey to the heart of the oil´s Big Bang

He looked here and there: Argentina, Brazil, Mexico, Colombia. And he put the first full strong in Vaca Muerta. That's how Vista was born. He partnered with former YPF Juan Garoby, Pablo Vera Pinto and Alejandro Cherñacov. And they added Matías Weissel as the brain of the operation of the formation. A nerd of oil that was in the first drilling of Vaca Muerta. There is not a team that knows the rock better. Gaston Remy of Dow came to complete the team as CEO of Argentina.

But it was not the only innovation. The first thing he did was to buy an operation in decline of conventional oil to Pampa Energía. And then a very large field in Bajada de Palo, in the heart of Vaca Muerta, surrounded by the giants of the industry. It wasn´t clear until it finally did.

"Vista's share has already increased by 30 percent and has not yet delivered its first results. "There is a smell of goal," they say in the Limay river offices".

The conventional operation became slim fit, dealt with deficiencies and increased production. It generated cash flow and with that the exploration of the unconventional operation accelerated. Go to the past to finance the future. Genius.

Today the company's stock has already increased by 30 percent and has not yet delivered its first numbers. "There's a smell of goal," they say in Vista. The requests of politicians, journalists and businessmen to visit the field are piled up and the name of Galuccio returns to circulate for very important positions.

But the man is focused. Vaca Muerta is that son he saw growing up from the cradle, but the long look is in Latin America. A wild and vibrant, dangerous land, where the pioneer spirit finds its best element.

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