YPF and Petronas have ratified the start of the massive development phase of the shale oil project that they are carrying out in the La Amarga Chica block, Neuquén province, Argentina.
Located in western Argentina, the Vaca Muerta deposit is considered as having the world’s second-largest shale gas and fourth-largest shale oil deposits.
Malaysia’s state-owned oil and gas company Petronas will have an equal stake in the project through its subsidiary Petronas E&P Argentina SA.
The goal is to reach by 2022 a production of 60,000 barrels of oil equivalent per day.
“This investment will allow us to increase YPF’s petrol production by 30% by 2022, which will represent a total increase for Argentina of 15%,” the statement said.
For the next four years, both companies plan to invest more than USD2.3 billion, YPF’s second largest direct investment so far, eventually reaching up to USD7 billion when the project is completed and production level reaches 75,000 barrels oil equivalent per day.
“We are proud of the solid relationship we have established with Petronas throughout the three pilot phases, in which we exceed the proposed objectives. This same link, together with the knowledge and experience acquired in the block, is what guarantees our success in the stage we are announcing today: the massive development phase of La Amarga Chica, “said Miguel Gutiérrez, president of YPF.
Successive governments have targeted Vaca Muerta to reverse Argentina’s energy deficit but the plans have been hindered by a lack of infrastructure.