Argentine state-run oil firm YPF and U.S. supermajor Chevron Corp. on Friday signed a memorandum of understanding to “explore non-conventional hydrocarbon development opportunities” in the massive Vaca Muerta shale formation, YPF said in a statement Friday.
The MOU calls for exploring opportunities to develop shale oil and gas reserves in Vaca Muerta, located in the western Argentine province of Neuquen, and studying the potential for applying improved recovery techniques, YPF added.
The Argentine government expropriated a controlling stake in originally state-owned YPF earlier this year from Spain’s Repsol, which maintains a 12 percent interest.
Prior to the stake seizure, Repsol had come under criticism by Argentine authorities for inadequate investment in oil and gas exploration by YPF.
Repsol Chairman and CEO Antonio Brufau, for his part, said in the wake of the expropriation that the recent discovery of Vaca Muerta was undoubtedly behind the move.
The MOU, signed Friday by YPF CEO Miguel Galuccio and the president of Chevron’s Latin American and African operations, Ali Moshiri, was the result of negotiations that began on Aug. 24.
The accord establishes the companies’ “interest in evaluating the development of a shale cluster,” and “sharing research and development for eventual joint projects,” YPF said.
Galuccio hailed the agreement with a partner of Chevron’s stature and said efforts will be made to achieve synergies between the two companies. He also said he is convinced the accord will be “just the first step in a long and significant relationship.”
According to YPF, 37 wells have been perforated, 27 have been completed and 10 are pending completion in Vaca Muerta, while 26 more wells are scheduled to be perforated in 2012.
These types of agreements are key planks in YPF’s $37.2 billion 2013-2017 investment plan, which is aimed at boosting oil and gas production by 32 percent over that five-year period, YPF said.
YPF posted 2.1 billion pesos ($458.4 million) in net income in the first half of 2012, down 10.1 percent from the same period of 2011.