YPF, Dow to invest US$500 mln to triple production at their existing shale gas joint venture in Argentina

17-Dec-15

Argentina's state-controlled YPF and the Argentinian unit of US-based Dow Chemical will invest US$500 mln in 2016 to triple production at their existing shale gas joint venture, marking the first major upstream investment since a new government took over last week, as per www.argusmedia.com. The companies are partners in the El Orejano block, located in the Vaca Muerta shale formation in the southwestern province of Neuquen. The new investment is aimed at increasing production to 2mn m3/d (70.6mn ft3/d) by the end of 2016, from a current 750,000 m3/d, YPF said. The two firms have been working together since 2013 on the country's first large-scale shale gas project and have already invested US$350 mln in the block. The fresh investment, which would be divided equally between the two companies, would involve drilling 30 new horizontal wells with four rigs. The block currently has 19 wells in production. "Vaca Muerta is a great opportunity for Dow because it allows us to have access to gas that is the main raw material in the petrochemical industry," Dow Argentina chief executive Gaston Remy said. To fully develop the 45km2 (17.4mi2) block, investment could eventually reach $2.5bn to drill more than 180 wells and set up associated infrastructure, YPF said. "We are seeing extraordinary results and it encourages us that a leader in the petrochemical industry trusts YPF for its first upstream development," YPF chief executive Miguel Galuccio said. Source Courtesy: www.argusmedia.com