ExxonMobil CEO Rex Tillerson said Thursday that his company could invest billions to help develop Argentina’s most famous shale play.
Tillerson told Bloomberg that Exxon could invest more than $10 billion in Argentina’s Vaca Muerte shale play over the next decades.
Exxon has invested about $200 million into the play so far and just received approval for a $250 million pilot project.
If the pilot project is successful, Tillerson expects Exxon to begin full development over the course of 20 to 30 years that could call for investment “well in excess of $10 billion,” Bloomberg said.
The Vaca Muerta shale play is located in the Neuquén Basin and is operated by Argentina’s YPF.
According to Schlumberger, Argentina has the third largest technically recoverable tight gas reserves in the world and the fourth largest technically recovered tight oil reserves.
The play was first discovered in 1908 and accounts for 57 percent of Argentina’s total gas production and 40 percent of its total oil production.
Recently elected Argentinian president Mauricio Macri has been busy courting international investment since taking office in December.
According to Bloomberg, Exxon is currently building a plant to remove impurities from natural gas along with a pipeline that will transport output from the company’s Vaca Muerta wells.
Exxon added 1 billion oil-equivalent barrels of proved oil and gas reserves in 2015, replacing 67 percent of production, including a 219 percent replacement ratio for crude oil and other liquids.
In April, Exxon Mobil reported first quarter 2016 earnings of $1.8 billion, or $0.43 per diluted share, compared with $4.9 billion a year earlier.
The company said the impacts of sharply lower commodity prices and weaker refining margins were partly offset by strong results from its Chemical segment.
Exxon slashed its capital 2016 capital spend by 25 percent from year ago levels.
The company now anticipates a $23 billion capital spending budget in 2016, down 25 percent from 2015.