Exxon Mobil Corp, the largest US oil company, will spend as much as 76.3 million dollars to explore and develop shale oil and natural gas in Argentina with Americas Petrogas Inc.
Exxon will gain a 45% stake in Americas Petrogas’s Los Toldos blocks, which cover 163,500 acres in the Neuquen Basin, Calgary-based Americas Petrogas said in a statement Tuesday.
Americas Petrogas plans to drill a well in the fourth quarter at its blocks, targeting the unconventional Vaca Muerta formation, which may hold as much as 240 trillion cubic feet of recoverable gas, according to the US Energy Information Administration.
“We believe the next major shale development outside of North America will be in the Neuquen Basin,” Guimar Vaca Coca, managing director for Americas Petrogas in Argentina, said in the statement.
Vaca Muerta has characteristics similar to reservoirs such as the Eagle Ford and Haynesville formations in North America, the company said. YPF SA, Argentina’s largest crude producer, announced in May it discovered the nation’s biggest oil find in two decades at Vaca Muerta.
“From a geological resource point of view, I think Argentina’s future is positive,” Jorge Piñon, a research fellow at Florida International University in Miami.
But regulatory uncertainty and a lack of continuity in fiscal terms and conditions are larger concerns for foreign oil companies working in Argentina, said Piñon.
“I think some of the major oil companies are looking for niche areas in which they can position themselves to take advantage of future opportunities,” he said.
Exxon will have more than 310,000 net acres in the Neuquen Basin following its deal with Americas Petrogas, Patrick McGinn, a spokesperson for the Irving, Texas-based company said in an interview.