Argentina’s YPF and Bridas, 50% owned by CNOOC, to invest $1.5B in Vaca Muerta shale oil development in Argentina
Argentina state-owned energy company YPF and Bridas, an Argentina-based oil and gas company 50% owned by China National Offshore Oil Corporation, agreed to invest $1.5 billion over the next 24 months to begin development in the massive shale oil deposits in the Vaca Muerta (“Dead Cow”) formation in the province of Neuquén—one of the largest shale oil formations in the world.
Vaca Muerta is present in an area of 30,000 km2 (7.4 million acres); of this area, YPF participates in 12,000 km2 (3.0 million acres, or 40% of the total. The estimated size of recoverable shale oil in the formation has increased to about 741 million barrels, according to the US Energy Information Administration (EIA).
The area of the deal encompasses 663 square kilometers; the $1.5 billion investment includes the acquisition by Bridas of 35% of Down Area Añelo and 24.5% of Bandurria. The development plan calls for 130 wells to be drilled over the next two years.
|Vaca Muerta shale. Source: YPF. Click to enlarge.|
While most of the development is targeting unconventional oil will, a portion will be for wet gas exploitation.
As part of the agreement, Bridas is also seeking $500 million in additional long-term funding.
As with an agreement signed earlier in December between YPF and Chevron, the deal is a “farm-in”, which brings YPF title over the area, while both companies share exploration and development costs, as well as know-how and technology.