The CEO of Argentine oil company YPF and the head of Latin American and African operations for Chevron Corp. met here Friday to discuss a potential agreement to develop the massive Vaca Muerta shale oil and gas formation.
Miguel Galuccio and Ali Moshiri discussed the "possibility of a strategic accord" to develop those reserves in southwestern Argentina, according to a press release issued by YPF, now state-controlled after the Argentine government expropriated a 51 percent stake in the firm from Spain's Repsol earlier this year.
During the meeting, Chevron's Moshiri expressed interest in partnering with YPF in developing the 30,000-sq.-kilometer (11,580-sq.-mile) Vaca Muerta formation, the world's third-largest unconventional oil and gas reserve.
According to U.S.-based auditor Ryder Scott, Vaca Muerta holds 22.8 billion barrels of oil equivalent.
"Chevron is very interested in coordinating joint projects and we want partners with the heft and experience of a company of this global stature," Galuccio said.
Both executives attended the meeting of the Council of the Americas on Thursday in Buenos Aires, where Galuccio stressed YPF's need for investors and predicted that Vaca Muerta was "the tip of the iceberg" in terms of Argentina's non-conventional hydrocarbon potential.
The talks with the second-largest U.S. oil company, which earned $13.7 billion in net income in the first half of 2012, are part of a campaign to recruit international investors to partner with the new YPF, in which Repsol maintains a 12 percent stake.
Prior to the stake seizure, Repsol had come under criticism by Argentine authorities for inadequate investment in oil and gas exploration by YPF.
Repsol Chairman and CEO Antonio Brufau, for his part, said after the expropriation move that the recent discovery of the massive unconventional shale gas and oil reserves in Vaca Muerta was undoubtedly behind the move to seize a controlling stake in YPF.
YPF plans to drill "250 exploratory wells between 2012 and 2017" to expand the country's "hydrocarbon frontiers," Galuccio said Thursday in presenting the results of the Argentina Exploratory Plan.
The company, he said, "is once again exploring like in old times. We're returning to a historic level of well-drilling activity," adding that "with high-risk exploration, YPF is raising the stakes."
Planning Minister Julio de Vido, for his part, said the "government's objectives are to produce more oil and more gas because they're the determining factors in Argentina's energy matrix." EFE