Argentine energy firm YPF signed an agreement Wednesday with U.S. oil supermajor Chevron Corp. to develop the massive non-conventional Vaca Muerta formation in southwestern Argentina.
Chevron's head of operations for Latin America and Africa, Ali Moshiri, and YPF CEO Miguel Galuccio were on hand for the signing ceremony, which took place in Houston and was broadcast via videoconference to Buenos Aires.
Galuccio hailed the deal as a "milestone" for Argentina's largest oil and natural gas producer.
Both companies agreed to the "terms and conditions" for the development of shale (non-conventional) oil in the Loma La Lata Norte and Loma Campana areas within Vaca Muerta, located in Neuquen province.
In September, Moshiri and Galuccio signed a memorandum of understanding on joint energy exploration that included Vaca Muerta, which stretches over an area of 30,000 sq. kilometers (11,580 sq. miles).
The Argentine government earlier this year seized a majority stake in YPF from Spain's Repsol, which maintains a 12 percent interest in its former unit.
The Spanish oil major has sued the Argentine government before the World Bank's International Center for Settlement of Investment Disputes.
It also brought suit against Chevron on Dec. 4 in a federal court in New York in the wake of the memorandum of understanding between YPF and the U.S. company to develop Argentina's energy assets.
YPF announced the discovery of non-conventional oil and natural gas reserves in Vaca Muerta in 2011 after successful results in the exploration phase. Development of that region is seen as a solution to Argentina's current energy deficit. EFE