Argentina’s YPF and Malaysia’s Petronas signed a $550 million deal to develop the Vaca Muerta shale field in Argentina, the fourth largest shale deposit in the world.
The deal covers a 72 square mile area in the Neuquén province in western Argentina.
YPF will invest $75 million and Petronas will invest $475 million to drill more than 30 wells over the next three years, Bloomberg said.
Petronas will also provide technical training in developing unconventional energy through its subsidiary Alberta-based upstream Progress Energy Resources, the Wall Street Journal said.
The program could be expanded to a five-year $1 billion deal if the results are positive.
Vaca Muerta has estimated reserves of about 23 billion barrels of oil.
“In line with our strategic plan and results obtained in Loma Campana, it appears to us a big opportunity for YPF and for Argentina to add Petronas as a partner,” YPF’s CEO Miguel Galuccio said.
The YPF-Petronas area will be called La Amarga Chica.
The project is north west of Loma Campana, a $1.6 billion YPF operated shale exploration project with Chevron.