State-run Argentine oil company YPF SA has reportedly reached a deal with Malaysia’s Petroliam Nasional Bhd (Petronas) to develop deposits of shale oil and gas in the Vaca Muerta formation in Patagonia.
YPF said the Malaysian state-owned oil company will provide $475 million of an initial investment totaling $550 million for a pilot phase scheduled to start early next year.
In the pilot phase, the partners plan to drill more than 30 horizontal and vertical wells using hydraulic fracturing in a section of Vaca Muerta known as the Amarga Chica Block. The investment is expected to exceed $1 billion in the following stages over the next five years. Vaca Muerta, in the remote eastern province of Neuquen, is believed to be hold the world’s largest deposits of shale oil and gas.