As per the deal, the joint venture plans to advance the exploitation program at the El Orejano gas field, which is a part of the Vaca Muerta shale formation in the southern province of Neuquen.
Dow and YPF have already invested $350m in the El Orejano project, which was launched in 2013. The project is currently producing more than 750,000 cubic meters per day of gas from 19 wells.
The JV intends to triple gas production to 2 million cubic meters a day by the end of 2016.
As part of this effort, the partners plan to drill 30 new wells next year. The partners estimate the investments to reach $2bn and the number of drill wells will rise to more than 180 in future.
According to YPF, the Vaca Muerta deposit is estimated to hold 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas. It is said to be the biggest shale reserves in the western hemisphere.
The US Energy Information Administration estimates that country hosts potential recoverable shale-gas reserves of 802 trillion cubic feet as well as shale oil of 27 billion barrels.
YPF is also partnering with Chevron to produce shale oil in Vaca Muerta. The firms earlier drilled unconventional oil wells with an investment of around $3.5bn, reported The Wall Street Journal.
Image: Officials from YPF and Dow. Photo: courtesy of YPF.
