State-run energy company YPF announced Friday a preliminary accord with Bridas International to exploit the massive non-conventional Vaca Muerta formation in southwestern Argentina.
The pact calls for an initial investment of $1.5 billion, YPF said in a regulatory filing.
Bridas, majority owned by Argentine mogul Carlos Bulgheroni, will receive 50 percent of YPF's rights in the Bajada de Añelo and Bandurria shale-oil fields if the deal materializes.
The agreement also envisions Bridas' loaning YPF $500 million for development of the non-conventional deposits.
YPF signed a similar accord last week with U.S. oil supermajor Chevron Corp. to develop the Loma La Lata Norte and Loma Campana areas within Vaca Muerta.
The Argentine government earlier this year seized a majority stake in originally state-owned YPF from Spain's Repsol, which maintains a 12 percent interest in its former unit.
The Spanish company 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. EFE