Total will invest $500m over the next three to four years for the development of a shale-gas field in Argentina.
The company has given the go-ahead to develop the initial phase of the operated Aguada Pichana Este license in the Vaca Muerta shale play in Argentina.
Total also plans to increase its interest in the license, co-owned by YPF, Wintershall Energia and Panamerica Energy, to 41% from 27.27%, pending approval from local authorities.
In this connection, Total has entered into a memorandum of understanding (MoU) with the partners in the project – YPF and Wintershall Energia which hold 27.27% stake each and Panamerican Energy which has 18.18% stake in the Aguada Pichana Este project.
Total exploration & production president Arnaud Breuillac said: "Launching this project is a key milestone in the development of the giant Vaca Muerta shale play. Total is also increasing its interest in the East part of the Aguada Pichana concession where the results of pilot wells drilled to date have been excellent.
“The development will benefit from the use of existing facilities, enabling the production of shale gas at a very competitive cost.”
The existing Aguada Pichana gas plant located in the Tierra del Fuego region will treat the gas produced from the project.
The gas plant is expected to be at its full production capacity of 16 million cubic meters per day which is equivalent to 100,000 barrels equivalent per day.
The French company said that its decision to go ahead with the development of the project had been driven by the guarantee on gas prices until 2021 which was announced by Argentina’s Ministry of Energy and Mines of the “Program for Stimulation of Unconventional Gas Developments”.
Total has been present in Argentina for about 40 years and operates about 30% of the domestic gas production.
The company's share of production in Argentina was 78,000 barrels of oil equivalent per day in 2016.
A pilot project is currently being carried out on the company's operated Rincon la Ceniza license, which lies in the Vaca Muerta wet gas window. Better results were seen so far.
Better productivity was also seen on an appraisal well drilled in 2016 on the nearby operated La Escalonada block to test the oil window.