Petronas to invest in YPF’s Vaca Muerte shale field in Argentina

Oil company YPF has signed a memorandum of understanding (MoU) with Malaysia’s national oil company Petronas for investment in its onshore Vaca Muerta shale formation in Argentina.

The companies are working towards a new investment agreement that will see the development of a 187km² area with shale gas potential, located in the northeast zone of Loma Campana in Neuquen province.

The companies will carry out a feasibility study for the commencement of a joint project and the subsequent negotiations leading to a possible investment agreement.

YPF controls 12,000km² of the Vaca Muerta field and the company’s oil and gas concessions cover around 40% of the field, which spreads across the provinces of Neuquen and Mendoza in southern Argentina.

Chevron has agreed to fund most of a $1.5bn joint venture with YPF in order to develop the field.

Nationalised in 2012 through a seizure of Repsol’s majority stake in the company, YPF has been seeking international partners to help it to develop the Vaca Muerta field.

Vaca Muerta, known as the host rock for major deposits of tight oil (shale oil) and shale gas, is said to have 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas resources.

Repsol-YPF made the large oil discovery in the Vaca Muerta formation in 2010.