BUENOS AIRES, Argentina - Argentina's state-controlled YPF oil company has persuaded Chevron Corp. to sign a long-sought deal to invest $1.24 billion in developing the South American country's shale oil deposits.
The joint venture adds up to $1.5 billion overall, the first major foreign oil investment in Argentina since President Cristina Fernandez seized control of YPF from Spain's Grupo Repsol last year.
YPF CEO Miguel Galuccio and Chevron CEO John Watson presented it Tuesday night to Fernandez, who issued two decrees this week granting special privileges to any oil company investing more than a billion dollars in new shale ventures. After five years, such companies will be able to export up to 20 percent of their crude and natural gas without paying taxes, and also be exempt from the currency controls that have scared away many other foreign investors.
The YPF-Chevron venture will start with a $300 million pilot hydraulic fracturing project involving more than 100 wells in an area known as the "Enrique Mosconi Cluster," part of the Vaca Muerta (Dead Cow) deposit in Neuquen province, where YPF says 15 teams are already extracting more than 10,000 barrels a day.
In a later stage of the project, YPF expects to develop more than 1,500 wells and by the year 2017 produce 50 million barrels of oil and 3 million cubic meters of natural gas each day, making it the most productive strike in Argentina, YPF said.
"Vaca Muerta is a world-class share and fits perfectly within our solid portfolio of non-conventional resources," Watson said. "It's consistent with our strategic objective of entering into new and attractive areas early in the process."
Galuccio said the deal could change Argentina's energy future, and is a show of confidence by a major international company.
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