Exxon Awarded 2 Unconventional Gas Blocks in Argentina

HOUSTON (Dow Jones Newswires), Jan. 4, 2011

Exxon Mobil said Tuesday it has been awarded two blocks to explore for unconventional gas in Argentina's western Neuquen province.

"It was late December when the agreements were signed," said Exxon Mobil's spokesman Patrick McGinn. YPF is Exxon's partner in the Loma del Molle and Pampa de las Yeguas I blocks, he added.

The agreements followed a tender round submission launched last year by the provincial oil and gas company Gas & Petroleo del Neuquen. The area is believed to contain vast reserves for tight sands and shale natural gas, two types of unconventional natural gas.

The Argentinean government has said the Neuquen basin holds an estimated 257 tcf of unconventional gas reserves, enough to cut Argentina's rising imports of liquefied natural gas and Bolivian gas.

The move shows the growing interest of oil giant Exxon Mobil to expand its footprint into the global shale gas business. Texas oil giant Exxon became the largest gas producer in the U.S. after it bought XTO Energy Inc. in June for $25 billion, excluding debt. In July, Exxon paid $695 million for Denver-based Ellora Energy Inc. and in late December it said it's paying $575 million for wells and reserves in Arkansas from Petrohawk.

Exxon has said XTO's North American reserves and expertise in unconventional resources will complement Exxon's assets in the U.S., Canada, Germany, Poland, Hungary and Argentina.

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