MercoPress. South Atlantic News Agency

YPF trying to convince Chevron to help develop massive shale deposits in Neuquen

CEO Galuccio and Chevron’s Ali Moshiri during the Council of Americas meeting in Buenos Aires

Argentina’s nationalized oil and gas company YPF and the head of Latin American and African operations for Chevron Corp. are discussing a potential agreement to develop the massive Vaca Muerta shale oil and gas formation in the Patagonian province of Neuquén.

YPF CEO Miguel Galuccio and Chevron’s Ali Moshiri discussed last week in Buenos Aires the “possibility of a strategic accord” to develop the shale reserves, according to a press release issued by YPF.

During the meeting, Chevron’s Moshiri expressed interest in partnering with YPF in developing the 30.000 square kilometres Vaca Muerta formation, the world’s third-largest unconventional oil and gas reserve. According to US-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 last week attended the meeting of the Council of the Americas in Buenos Aires, where Galuccio stressed YPF need for investors and predicted that Vaca Muerta was “the tip of the iceberg” in terms of Argentina’s non-conventional hydrocarbons’ potential.

The talks with the second-largest US oil company, which earned 13.7 billion dollars in net income in the first half of 2012, are part of a campaign to recruit international investors to partner with the new YPF.  Last May the Argentine government seized a 51% stake of YPF from Spain’s Repsol, which still holds 12% stake.

Repsol had come under strong criticism by Argentine authorities for allegedly inadequate and insufficient investment in oil and gas exploration by YPF.

Repsol Chairman and CEO Antonio Brufau revealed after the seizure of YPF that the recent discovery of the massive unconventional shale gas and oil reserves in Vaca Muerta “were undoubtedly behind the move to seize a controlling stake in YPF”.