Shell Argentina Country Chairman Teófilo Lacroze, and YPF Chairman Miguel Ángel Gutiérrez, have signed preliminary terms and conditions of an agreement to develop a shale gas pilot project in Vaca Muerta, Neuquén. Shell estimates an investment of $300 million, which would occur in two phases.
The agreement was signed 23 February in YPF’s offices in Buenos Aires. Within the coming months, Shell and YPF will negotiate definite terms of the agreement which – subject to the subsequent regulatory approval – would provide each company 50% working interest in Bajada de Añelo, to develop a pilot program under Shell operation.
“We are very pleased to partner with Shell, a company that has vast experience in shale oil and gas development in the United States,” Mr Gutiérrez said during the signing act. Additionally, he noted the importance of a new partner in Vaca Muerta, particularly “after the addendum to the collective bargaining agreement” that was recently sealed among critical stakeholders in the Neuquén Basin.
“Shell has demonstrated excellent results in unconventional exploration in Vaca Muerta, and considers the local domestic gas market of high interest. In collaboration with YPF, we expect to gain further understanding of the Vaca Muerta play. If the agreement is reached, we would be further contributing to developing the energy potential of our country,” Mr Lacroze said.
Bajada de Añelo is a 204 sq km (55,000 acres) area, located northeast of Loma Campana, a strategic region in Vaca Muerta that has both shale oil and shale gas resources.