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    BP, Total to Lead $1.15bn Argentina Shale Project


State YPF with partners BP-led Pan American Energy, Total and Wintershall have agreed terms with Neuquen province to develop the Vaca Muerta shale in 3 areas.

by: Mark Smedley

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BP, Total to Lead $1.15bn Argentina Shale Project

Argentina's state producer YPF said July 18 that it, together with partners BP-led Pan American Energy, Total and Germany's Wintershall, had signed an agreement with the province of Neuquen to develop the Vaca Muerta shale gas basin in Aguada Pichana (now to be split) and Aguada de Castro.

The project commits equity investments of $1.15bn through December 2021 through BP- and Total-led partnerships, adding to the $500mn already invested in 2014-16 in those areas. 

"We have high expectations. This agreement ratifies our commitment to the country's energy development. The teamwork of the companies, the national and provincial governments and the unions was the key to value the area and to summon the necessary investments," said YPF president Miguel Gutierrez.

The work plan out to 2021 in Aguada Pichana Este (east), operated by Total, entails 48 horizontal wells with Vaca Muerta the objective; these will be in addition to 12 wells already drilled.

In the Aguada Pichana Oeste (west) and Aguada de Castro areas, operated by BP majority-owned Pan American Energy (PAE), 24 horizontal wells will be drilled out to 2021 on the Vaca Muerta formation, and surface facilities will be built as necessary to transport production to the treatment plant in Aguada Pichana Este.

Wintershall said July 18 it will keep its original participation interest (27.27%) in all conventional and tight gas projects. But in shale gas projects targeting the Vaca Muerta formation, it will keep a 22.5% participating interest (selling 4.77% to Total). Wintershall will sell its participating interest in Aguada Pichana Oeste to BP-led PAE, which will the block's become operator. Wintershall declined to disclose the value of either transaction to NGW.

The Aguada Pichana Este area, with 761km², will have Total (41% and operator), YPF (22.5%), Wintershall (22.5%) and BP-led PAE (14%). The newly hived-off Aguada Pichana Oeste area and Aguada de Castro, covering 605km² and 163 km² respectively, will both have BP-led PAE as operator (45%) alongside partners  YPF (30%) and Total (25%).

YPF said that the investment of $1.15bn from mid-2017 to December 2021 will be allocated thus: $675mn in Aguada Pichana Este, $475mn between Aguada Pichana Oeste and Aguada de Castro blocks.  

Total said in April that it sanctioned a key investment in Argentina's Vaca Muerta shale gas basin; the agreement with the province though was required. BP owns 60% of PAE.


Mark Smedley