Exxon Mobil chairman and CEO Rex Tillerson said that the company would make the investment in the Vaca Muerta, a geologic formation of Jurassic and Cretaceous age, located at Neuquén Basin in Argentina.
Reuters cited Tillerson as saying that the pilot program is being developed by Exxon’s subsidiary XTO Energy in partnership with provincial energy company Gas y Petroleo de Neuquen.
Exxon Mobil has already invested $200m in exploratory drilling in the region, which is claimed to be the world’s second-largest shale gas deposit.
In the next few months, the oil giant plans to make additional $250m investment on the pilot project.
If successful, the full development of the project would commence during a period of 20 to 30 years.
Buenos Aires Herald quoted Tillerson as saying: "We recently received approval by the provincial government to pursue a pilot programme to further analyze the resource."
"That program will begin this winter and depending on the result we could decide to invest more if we find that we are able to enter full development."
According to the US Energy Information Administration (EIA) estimates published in its comprehensive assessment of global shale resources, Argentina holds the world’s second-largest shale gas reserves after China. It has fourth-largest shale oil following Russia, the US and China.
The Argentina government estimates that the development of the Vaca Muerta would require $200bn investment in the long-term to address its energy crisis.
Image: Argentina is estimated to hold the world’s second-largest shale gas reserves. Photo: courtesy of Rosemary Ratcliff/ FreeDigitalPhotos.net.
