YPF: Chevron Open to Unconventional Resources Partnership

BUENOS AIRES - Argentina's largest oil company, state-run YPF SA, said Friday that Chevron Corp. has expressed interest in partnering with the Argentine company to develop unconventional oil resources.

In a statement, YPF said Ali Moshiri, Chevron's president of Latin America and Africa, signaled his interest in developing a cluster of shale oil wells with YPF in the Vaca Muerta formation during a meeting early Friday with YPF Chief Executive Miguel Galuccio.

The executives also discussed cooperation in the rehabilitation of aging wells.

"We had concrete dialogue about different alternatives of cooperation," Mr. Galuccio said. "Chevron is very interested in developing projects together [with YPF], and we want a partner with the weight and experience of this world-class company."

A Chevron spokesman declined to comment when contacted by Dow Jones Newswires.

Argentina is home to vast unconventional oil and gas resources locked away in shale rock.

Argentina ranked third in the world, behind China and the U.S., in potentially recoverable shale-gas reserves, with 774 trillion cubic feet, according to a study last year by the U.S. Energy Information Administration. Argentina also has large quantities of shale oil.

The Vaca Muerta formation in the Neuquina Basin is thought to hold significant unconventional resources.

Chevron plans to drill three exploratory wells in Vaca Muerta this year targeting unconventional oil and gas, Mr. Moshiri said at a conference in Buenos Aires Thursday.

YPF plans to invest about $1.36 billion to test unconventional extraction techniques next year. If successful, YPF will invest an additional $12 billion in unconventional resources as part of its $35 billion 2013-17 investment plan.

Mr. Galuccio has said YPF will fund a portion of that ambitious plan with its own resources, and is searching for partners and investors to share the burden.
 

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