MercoPress. South Atlantic News Agency

Argentine billionaire ready to invest 500m dollars in Patagonia shale development

“We aspire that shale gas and oil become a boost for Argentina’s growth” said tycoon Eurnekian

Argentine billionaire Eduardo Eurnekian announced that his company Corporation America continues to work with government controlled oil company YPF “to develop projects” which could involve a 500 million dollars investment in the country’s rich shale deposits.

“We will establish a strategic partnership with YPF to develop oil and gas resources. A time-table has not yet been set up but we will start working on it. It will be an investment on areas agreed to with YPF” said Eurnekian whose Corporation America also manages Argentina’s airports, and also in Uruguay and Italy, among other investments.

“I haven’t met with (YPF CEO Miguel) Galuccio in the past few week but members of my company have. A lot of investments like ours are needed to develop shale projects in Argentina” added the tycoon. His company signed a memorandum of understanding with YPF in later 2012.

In a speech at the Argentine Oil & Gas Expo, Eurnekián didn’t specify when the deal with YPF would be sealed, although he did say it could possibly be before the end of the year.

Even though he didn’t say if the deal would focus on unconventional resources, he told journalists after the conference he would prefer to focus on conventional wells since they are “less risky.”

“We aspire that shale gas and oil become a boost for Argentina’s growth and us business leaders will have to respond with efficiency,” he said. “It’s a challenge that will require optimism, creativity and tolerance from business leaders.”

The head of Corporation America considered shale projects to be important but he emphasized it was more of a long-term strategy. “Long-term is always the best way to think regarding unconventional oil and gas projects. Argentina will be able to develop its shale resources after some presidential periods,” he said.

Corporation America recently paid 200 million dollars for 81% of the shares of the energy consortium Compañía General de Combustibles.

Argentina’s import energy bill has soared to almost 9 billion dollars for having frozen the price of fuel for a decade, thus discouraging further exploration. In a drastic change of the situation the government of Cristina Fernandez in mid 2012 seized a majority stake in YPF, which belongs to Spain’s Repsol.

The excuse was the lack of investment and the desperate need to develop the huge Vaca Muerta shale deposits, considered among the richest in the world, but given the legal situation not many companies have been tempted to invest. So far Chevron, Dow plus German and Argentine companies have taken the risk and accepted the terms.

Eurnekian who as a contractor has many interests in working with the Argentine government most probably could be the next.