Chevron optimistic about Argentina deal as province OKs exploration

Chevron (CVX) says it is optimistic it will move into phase two of investment to develop Argentina's massive shale oil and gas deposits in tandem with state-run YPF, as lawmakers in Neuquen province approve an agreement paving the way for exploration by the two companies.

As part of the deal, CVX plans to initially invest $1.24B in a pilot project to develop shale deposits in the Vaca Muerta formation in the province; the deal involves splitting investment costs and profits, with YPF retaining operating control.

Argentina ranks second in the world, behind China, in potentially recoverable shale gas reserves, with 802T cf, and is fourth in shale oil with an estimated 27B barrels, according to the U.S. EIA.

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Comments (2)
  • User 353732
    , contributor
    Comments (5160) | Send Message
    It is unlikely that this transaction can be replicated by CVX or anyone else in Argentina.
    CVX is getting a one time deal designed to validate the commercial value of Argentine shale and attract other foreign capital but on lesser terms.
    Argentina is a place for Chinese and European state owned energy firms who are satisfied with much lower returns than private energy companies and are better equipped to manage expropriation risk
    30 Aug 2013, 01:10 PM Reply Like
  • Caiman Valores
    , contributor
    Comments (2333) | Send Message
    I have to agree, Chevron have played this uncannily well and are well positioned to reap significant benefits from this play.
    5 Sep 2013, 12:53 AM Reply Like
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