Argentina’s YPF signed a memorandum of understanding with China’s Sinopec Wednesday to develop multiple oil and gas fields, a deal that could possibly include projects at the Vaca Muerta shale play.
“The memorandum of understanding, signed today in Beijing, reflects the intentions of both parties to form a joint venture that will cover different market segments, upstream and potentially downstream,” YPF said.
Argentina’s oil prices are not tied to international prices and a barrel of crude produced in the country currently sells for about $77, offering the two companies some protection from current price weakness.
Sinopec is already the fourth largest oil producer in Argentina but has not yet tapped the country’s shale plays, though to be some of of the largest reserves in the world.
YPF has been courting numerous international companies to help it exploit the country’s shale oil and gas plays.
Last year, Chevron signed a deal with YPF to spend up to $15 billion to drill about 170 wells in the Vaca Muerta play.
Argentina officials estimate that $200 billion in investments is needed to fully exploit the country’s shale reserves.