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Shell yesterday cut the ribbon on a 10,000-bpd oil and gas treatment plant in its acreage in the Vaca Muerta shale formation in Argentina. The construction project was first announced back in 2014 as part of Shell’s development strategy for the play, where it operates the Sierras Blancas, Cruz de Lorena, and Coiron Amargo Sur Oeste oil and gas blocks.
Last year, the Anglo-Dutch company said it will pour $300 million annually into its Vaca Muerta operations until 2020, both in upstream and downstream operations.
Shell is not the only international oil major that has set their sights on the vast play. Exxon last year said it could invest as much as $10 billion in Vaca Muerta over the next two or three decades.
Chevron has also been quick to explore the opportunities that what could be the world’s second-largest shale gas play, and has invested $1.5 billion in its joint venture with Argentina’s YPF.
BP is also there, choosing the Argentine play over the U.S. star, the Permian. According to CEO Bob Dudley, Vaca Muerta is much more affordable than the Permian.
Schlumberger became the latest addition to the list, after earlier this month the oilfield service major struck a deal with YPF to invest $390 million in the development of the Argentine company’s Bandurria Sur block.
The Argentine government is doing all it can to keep such investors coming in. Mauricio Macri’s cabinet has agreed to lower local content requirements that are often off-putting for foreign investors, and has also scrapped a duty on oil exports that has been in place for 15 years to motivate more oil and gas investments.
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The Vaca Muerta formation is estimated to hold some 16.2 billion barrels of crude oil and 308 trillion cu ft of natural gas, which makes it the second-largest in terms of gas reserves.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.