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Argentina's YPF, Malaysia's Petronas sign $550 mn shale deal

Argentina's YPF, Malaysia's Petronas sign $550 mn shale deal

Posted by Juan Gavasa on December 10, 2014

Argentine state-controlled energy company YPF said Wednesday it has signed a $550 million agreement with Malaysia's Petronas for the development of non-conventional hydrocarbon reserves in the Vaca Muerta deposit.

Petronas CEO Tan Sri Dato' Shamsul Azhar Abbas and his YPF counterpart, Miguel Galuccio, signed the agreement in Kuala Lumpur, YPF said in a statement. The companies will jointly develop the La Amarga Chica block in the southwestern Argentine province of Neuquen beginning in March 2015, when the first of three pilot phases will commence.

"Petronas will contribute $475 million with the goal of drilling 35 vertical and horizontal wells, completing a 3D seismic data acquisition and processing program covering the entire area, and setting up facilities for evacuating the production from the area during the pilot."

Depending on the results, the companies foresee completely developing the 187-sq.-kilometer (72-sq.-mile) block by drilling more than 900 wells. The agreement with Petronas follows the $1.2 billion accord YPF signed last year with U.S. energy supermajor Chevron to develop the Loma Campaña and Loma La Lata Norte areas of Vaca Muerta, Argentina's largest shale formation.

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