By Shane Romig
BUENOS AIRES--Argentine oil company YPF SA has signed a letter
of intent with a subsidiary of Malaysia state energy company
Petroliam Nasional Bhd to work toward an investment and exploration
agreement in Argentina's vast Vaca Muerta shale oil and gas fields,
YPF said Tuesday.
No financial details were provided. YPF and Petronas plan to
negotiate development of a 187-square-kilometer area of the Vaca
Muerta formation known as La Amarga Chica, YPF said.
The deal comes a week after YPF said it had agreed to pay $852
million for all of Apache Corp's. oil and gas operations in the
South American country, as part of an effort by the state-owned
company to increase gas output.
Argentina ranks second in the world, behind China, in
potentially recoverable shale-gas reserves, with 802 trillion cubic
feet, according to a study last year by the U.S. Energy Information
Administration. Argentina also ranks fourth in shale oil with an
estimated 27 billion barrels.
YPF's oil and gas concessions cover about 40% of Vaca Muerta,
which spreads across the provinces of Neuquen and Mendoza in
southern Argentina. Chevron Corp. has agreed to fund most of a $1.5
billion joint venture with YPF to develop Vaca Muerta.
YPF is currently involved in talks with Argentina's government
and the Spanish energy company Repsol to compensate Repsol for the
expropriation of its majority stake in YPF in 2012. The parties
reached a preliminary deal in November in which Argentina agreed to
pay Repsol $5 billion in government bonds.
Write to Shane Romig at shane.romig@wsj.com
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