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BUENOS AIRES—Pan American Energy, one of Argentina's leading oil and gas companies, plans to invest $1.4 billion in the country, people familiar with the plans said this week.

Pan American runs the largest oil field in Argentina, Cerro Dragon, and has so-called tight gas projects in the province of Neuqué n, home to Vaca Muerta, one of the world's leading resources of unconventional oil and gas. The company is expected to announce that it will invest around about $900 million in production at its oil field in Chubut province. Most of the rest of the investment likely will go to Neuqué n, people familiar with the plans said.

A spokesman for Pan American, which is expected to announce details of its plans late Thursday afternoon alongside Argentine President Mauricio Macri, didn't respond to repeated requests for comment. It was unclear how long ago the company made its investment decision.

It also was unclear if the investment would occur in 2016 or over a longer period.

"This is remarkable under current events. This is quite a substantial investment," said Daniel Gerold, director at G&G Energy Consultants, who noted that low global oil prices have caused other companies here and abroad to slash capital expenditures.

Pan American's plans come as the Macri administration is working feverishly to boost investment in Argentina.

Since taking office in December, Mr. Macri has overhauled the populist policies of his predecessor, devalued the currency, eliminated currency controls and allowed companies to repatriate dividends. But, in the energy industry, he has maintained policies that artificially elevate oil and gas prices, ensuring investors a better return than what they would get if prices were freely set by the market.

Last year, Argentina spent about $11 billion to sustain oil and gas prices, according to one government estimate. Motorists funded much of that for the oil sector by paying about double what U.S. drivers do for a gallon of gasoline. But the government subsidies have kept oil and gas production from plummeting and have prevented widespread industry layoffs and related union protests, officials say.

The subsidies haven't inoculated Argentina from low global oil prices and related problems facing other companies across the world. The number of working rigs in Argentina in June was down 40% from a year earlier, according to Baker Hughes Inc.

Still, with 63 active rigs last month, Argentina had more than any country in Latin America. Venezuela had 53 working rigs and Mexico had 20, Baker Hughes said.

Neuqué n province is home 27 billion barrels of technically recoverable oil and 802 trillion cubic feet of gas trapped in a layer of shale up to 1,200 feet thick, according to the U.S. Energy Information Administration. In theory, that gives Argentina the potential to some day be one of the world's leading unconventional oil and gas producers, proponents of investment say.

Industry executives here and abroad, including Ali Moshiri, president of Latin America and Africa for Chevron Corp., which has a multibillion-dollar joint venture with YPF, Argentina's state-owned oil company, have said the price incentives are critical to attracting investment in the country.

"The government is to be praised for this decision, which is quite unpopular, especially among economists who say prices should be linked to international levels and that oil could be imported at a lower costs," Mr. Gerold said.

Write to Taos Turner at taos.turner@wsj.com

(END) Dow Jones Newswires

July 14, 2016 13:15 ET (17:15 GMT)

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