Chevron, YPF boost spending to develop Argentine shale
Chevron Corp and state-controlled YPF SA plan to spend an additional $1.6 billion to develop Argentina's Vaca Muerta shale formation further, boosting plans for new wells this year and announcing fresh exploration projects.
The project, announced today, will help Chevron boost its oil and natural gas production, which has been stubbornly flat the past few years despite annual global capital spending of around $40 billion.
It should also help ease concerns about foreign investment in Argentina and should give the country fresh capital to develop one of the largest energy reserves in the Western Hemisphere.
Chevron and YPF began drilling in the region last year, with Chevron agreeing to spend $1.24 billion for YPF to drill 161 wells as the project's operator, a deal that was widely seen as a test phase by Wall Street.
Chevron and YPF said today they would jointly spend an additional $1.6 billion to drill 170 wells this year, up from previous estimates for 140 wells this year.
Additionally, Chevron will spend $140 million to explore the Narambuena region of the Vaca Muerta.
"YPF is a reliable partner and operator that is advancing the project in the right direction," Ali Moshiri, Chevron's head of African and Latin American exploration and production, said in a statement.
Chevron's decision "is a great demonstration of confidence in the work of YPF and the potential of unconventional hydrocarbons of Argentina," Miguel Galuccio, YPF's chief executive officer, said in a statement.