Having already invested $200 million in Argentina's Vaca Muerta shale - the world's second-largest shale gas deposit - supermajor ExxonMobil is now saying it may invest at least $10 billion in this play over the next 2-3 decades, Bloomberg reports.
A pilot project coming up this summer will see Exxon invest $250 million, and based on that project's success, Exxon will launch full-scale development to span the next 20-30 years for an investment that could be "well in excess of $10B," Bloomberg quoted Exxon Chairman and Chief Executive Officer Rex Tillerson as saying Thursday.
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Argentina is home to 27 billion barrels of recoverable oil and 802 trillion cubic feet of natural gas, primarily in and around multiple prolific shale basins in the central Neuquen province, including the prized Vaca Muerta shale.
This shale formation is what is spurring talk that the next shale boom will be in Argentina. As testament to this, Argentina's state-run oil giant, YPF, is reportedly planning to sell off its conventional acreage and focus all of its attention on exploration and production in the Vaca Muerta, according to unnamed government sources cited by Interfax.
The news agency cited a "source close to Argentine Energy Minister Juan Jose Aranguren, as saying on Wednesday that the government had instructed YPF to prioritize unconventional exploration and sell of conventional blocks with low production potential.
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According to Bloomberg, Exxon is eyeing Vaca Muerta as an "opportunity to reverse production losses and add reserves after a $35-billion wrong-way bet on U.S. natural gas and a Russian exploration venture that was derailed by international sanctions."
In Argentina, Exxon is building a natural gas processing plant and a pipeline network that would link up with Vaca Muerta well production, the news agency reported.
By Charles Kennedy of Oilprice.com
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