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Malaysia's Petronas signs $550 mn Argentine shale deal

AFP

Petronas petrol station in Kuala Lumpur on March 3, 2011Petronas petrol station in Kuala Lumpur on March 3, 2011

Petronas petrol station in Kuala Lumpur on March 3, 2011Petronas petrol station in Kuala Lumpur on March 3, 2011

The Malaysian and Argentine state energy firms Petronas and YPF signed a deal Thursday to invest $550 million to develop shale oil in Argentina's massive Vaca Muerta fields, YPF said.

Malaysia's Petronas will contribute $475 million of the total investment in the Amarga Chica block, part of a sprawling shale oil and gas find in southwest Argentina that is estimated to contain the equivalent of 27 billion barrels of oil.

The two firms signed the deal in Kuala Lumpur after telephone talks between Argentine President Cristina Kirchner and Malaysian Prime Minister Najib Razak, YPF said in a statement.

"The two companies will at the same time evaluate expanding their strategic partnership to other exploration areas with potential for non-conventional resources," said the Argentine firm.

YPF has signed similar deals with US firms Chevron and Dow Chemical.

Other American, French and German companies have independent exploration operations in Vaca Muerta.

Vaca Muerta is a 30,000-square-kilometer (11,500-square-mile) geological formation in the Patagonia region.

Oil companies are keen to tap its vast oil and gas deposits using the controversial technique known as fracking, which involves shooting a high-pressure blast of water and chemicals underground to release the fossil fuels trapped between layers of shale rock.

YPF has the rights to more than 70 percent of the 180 wells currently being developed at Vaca Muerta, but is looking for foreign investment and technical help to develop them.

Date created : 2014-08-29