Oil and natural gas explorer Chevron Corporation, through its subsidiary, has signed an agreement with affiliates of the Argentine state-owned oil producer YPF to further develop oil and gas resources in the Vaca Muerta shale oil field in the Neuquén province.
Chevron will initially invest $1.24bn for the development of oil field.
Works under the first phase of development in the Loma La Lata Norte and Loma Campaña areas include the drilling of 100 wells in a 5,000-acre tract, which is part of a 96,000-acre concession.
Currently, the Loma La Lata field produces more than 10,000 barrels of oil-equivalent per day, while Chevron Argentina produces an average of 21,000 barrels of crude oil and 4 million cubic feet of natural gas in the Neuquén Basin.
George Kirkland, vice chairman of Chevron Corporation, said: “This strategic investment will allow Chevron to take part in the Vaca Muerta, one of the most exciting shale oil and gas plays in the world today. It provides Chevron with a new opportunity to profitably grow production beyond our 2017 production target of 3.3 million barrels per day.”
The agreement will allow Chevron to enter into the shale regions outside the US.
“Chevron has a long history in Argentina, and this project demonstrates our commitment to the country, its economic development and its goal of achieving energy self-sufficiency,” said Ali Moshiri, president of exploration and production for Africa-Latin America at Chevron.
Apart from encouraging global oil and gas players to invest in the country, the agreement will help Argentina to increase its production from Vaca Muerta.
Chevron produces crude oil and natural gas in Argentina through a wholly owned subsidiary, Chevron Argentina, which is the sixth-largest producer of oil in the country.