Argentina's state-run oil firm YPF, France's Total, Wintershall Energía and BP unit Pan American Energy have announced a joint investment of $1.15bn to increase shale gas production from Vaca Muerta.
The investment to develop non-conventional hydrocarbons of Vaca Muerta, in the areas of Aguada Pichana and Aguada de Castro will be made through December 2021.
It will take the total investment in Vaca Muerta, one of the world's largest shale formations, to $1.65bn, as $500m was already spent by the companies between 2014 and 2016.
YPF president Miguel Gutiérrez said: “We have high expectations. This agreement ratifies our commitment to the country's energy development.
“The teamwork of the companies, the national and provincial governments and the unions was the key to value the area and to summon the necessary investments.”
The provincial government in Neuquen, where Vaca Muerta share formation is located, has approved the subdivision of the Aguada Pichana area into two and combining it with the Aguada de Castro area.
Total will be the operator of the eastern part of 761 km2 Aguada Pichana area with a 41% stake, while Pan American Energy will operate the western part of that area as well as Aguada de Castro with a 45%.
Aguada Pichana Este area will see an investment of $675m, while the remaining $475m will be made in the Aguada Pichana Oeste and Aguada de Castro blocks.
Neuquino governor said: “This agreement is the result of a year of hard work and demonstrates our confidence in the hydrocarbon basin.
“This investment generates possible new investments, production and genuine work. The agreement shows that when working as a team builds the collective development of the country.”
In the Aguada Pichana Oeste and Aguada de Castro areas, 24 horizontal wells are planned to be drilled until 2021.
In Aguada Pichana Este, 48 horizontal wells will be drilled with Vaca Muerta objective, which will be added to the 12 already drilled wells.
Image: The spending will take the total investment in Vaca Muerta to $1.65bn . Photo: courtesy of Rosemary Ratcliff/ FreeDigitalPhotos.net.