Gazprom signs agreement with YPF to develop hydrocarbon projects in Argentina

Energy giants Gazprom from Russia and YPF from Argentina have signed an agreement under which the firms intend to co-operate for hydrocarbon exploration and production in Argentina.

The deal aims at developing tight and shale hydrocarbons in Argentina and outline ‘the principles for cooperation for a final accord that could be signed in the Russian spring,’ reports Bloomberg.

YPF, the state run energy giant from Argentina, is on the lookout for financing partners for developing a shale formation in the country, called Vaca Muerta, which has been estimated to have reserves of at least 23 billion barrels of oil.

The firm has already been partners with Chevron, which is presently producing 43,000 barrels of oil equivalent a day, and Dow Chemical for a gas development in an area called El Orejano.

YPF has also signed similar deals with Malaysia’s Petronas and China Petroleum & Chemical for energy developments.

Gazprom Management Committee chairman Alexey Miller said: "The Agreement we signed today is of great importance for strengthening the strategic partnership relations between our companies.

"Joint exploration and production activities in Argentina will give a considerable momentum to the oil & gas industry development in the Republic."

YPF CEO Miguel Galuccio was quoted by Bloomberg as saying: "We clearly said in our business plan that we needed large partners to develop our resources as it wasn’t going to be possible to do it by ourselves.

"We hope Gazprom becomes a good partner for YPF like Chevron, Dow and Petronas are now."

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Image: The deal will lead to tight and shale hydrocarbons developments across Argentina. Photo: courtesy of YPF.