BUENOS AIRES: Argentina's state oil company YPF announced that it had signed a memorandum of understanding (MOU) with a subsidiary of Malaysia's national oil company Petronas for unconventional oil and gas resources development.
Both companies have agreed to work towards a new investment agreement for developing a 187-square-kilometer area with shale gas potential, located in the northeast zone of Loma Campana, in Neuquen province, said YPF in a statement.
Following the signing of the MOU, the technical teams of both companies will continue working on details, including the feasibility study for starting a joint project and the subsequent negotiations leading to a possible investment agreement, said YPF.
YPF is Argentina's main hydrocarbon producer with a higher than 35 percent share of the national oil and gas market. It controls 12,000 square kilometres of Vaca Muerta, where the area with shale gas potential mentioned in the MOU is located, and produces more than 20,000 barrels of oil and gas from Vaca Muerta daily.
Meanwhile in the Malaysian capital KUALA LUMPUR, a YPF statement said that Petronas signs a preliminary agreement with Argentinian firm YPF to invest in the giant gas and shale oil field at Vaca Muerta at the foot of the Andes.
Petronas has expressed interest in a shale oil field in Neuquen province at the foot of the Andes in western Argentina, said the statement.
Argentina has launched a global drive for foreign investment in Vaca Muerta, seen as one of the most potentially lucrative fields in the world.
German firm Wintershall, US giant Chevron and Chinese-Argentinian company Bridas have already announced more than $US5 billion worth of investment seeking to exploit unconventional hydrocarbons at Vaca Muerta.
French company Total is conducting exploration at the site while Russia's Gazprom and Mexico's Pemex have also been approached.
Argentina reported an energy deficit in 2013 of $US8 billion and is keen to boost domestic production to limit imports. -- BERNAMA