Argentine's state oil and gas company YPF and Malaysian Petronas will invest jointly US$2.3 billion in an oil production project in the Vaca Muerta shale play, one of the largest in the world. The project, S&P Global Platts reports, envisages daily production of 60,000 barrels of crude oil and gas, to be reached by 2022.
The Argentine company said in a statement the two had already spent US$550 million on exploration in the La Amarga Chica area, and have achieved production at a daily rate of 9,800 boe. Over the long term, the partners will invest another US$4.7 billion over 20 years to boost production to 75,000 bpd, which will be the peak for the deposit.
Last year, YPF said it planned to spend US$21.5 billion on new oil and gas production over the next five years, eyeing a 26-percent increase in crude oil production. The company said it would sell some assets to gather the funds necessary for the ambitious production-raising plan, and it will also enlist the help of other companies, which will contribute an estimated US$8.5 billion to its five-year investment program.
Exxon, BP, Total, and Chevron are among the companies that have already pledged substantial funds for oil and gas exploration and production in Vaca Muerta, which holds reserves estimated at 22.8 billion barrels of oil equivalent. Argentina also has 2.4 billion barrels of conventional oil reserves, and is also hoping to score major discoveries offshore, to which end it will schedule a bidding round next year. Hopes are that the pre-salt basin along the Brazilian coast could extend into the Argentine continental shelf.
The country's energy ministry expects that Vaca Muerta will be instrumental in the planned twofold increase in the national oil and gas production to 1 million bpd of crude and 260 million cubic meters of gas by 2023. That would entail an increase in exports to 500,000 bpd of crude and 80 million cubic meters of gas.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More