Argentina's Shale Industry Lures International Oil Companies

"Developing our unconventional resources is our top challenge ...  and the key to our oil and gas independence," YPF said on its website.

YPF was brought back under state control in 2012 when it was expropriated from Spain's energy giant Repsol.

The reserve area YPF is working in at Vaca Muerta is 77 percent oil and the rest is natural gas, according to the company.

While the volume may not be massive, Argentina is a mid-sized economy with just 42 million people. In July, YPF was producing about 8,000 barrels of unconventional oil per day.

YPF expects to increase production to 17,000 barrels of oil per day (bopd) later this year, 38,000 bopd in 2014 and 60,000 the following year.

By 2017, authorities hope Argentina will be producing 100,000 bopd, as well as 13 million cubic meters a day in natural gas.

Unconventional oil is petroleum produced or extracted using techniques other than the conventional (oil well) method. Oil industries and governments across the globe are investing in unconventional oil sources due to the increasing scarcity of conventional oil reserves.