Shell Argentina Country Chairman Teófilo Lacroze and YPF Chairman Miguel Ángel Gutiérrez have signed preliminary terms and conditions of an agreement to develop a shale gas pilot project in Vaca Muerta, Neuquén. Shell estimates an investment of $300 million, which would take place in two phases.

The agreement was signed in the offices of YPF, in Buenos Aires. Within the next few months, Shell and YPF will negotiate definite terms of the agreements that, subject to the subsequent regulatory approval, among others, would provide each company 50% working interest in Bajada de Añelo, to develop a pilot program under Shell operation.

“We are very pleased to partner Shell, a company that has vast experience in shale oil and gas development in the United States” said Gutiérrez during the signing. Additionally, he noted the importance of a new partner in Vaca Muerta, particularly “after the addendum to the collective bargaining agreement” that was recently sealed among the most critical stakeholders in the Neuquén basin.

“Shell has demonstrated excellent results in unconventional exploration in Vaca Muerta, and considers the local domestic gas market of high interest. In collaboration with YPF, we expect to gain further understanding of the Vaca Muerta play. If the agreement is reached, we would be further contributing to develop the energy potential of our country” said Lacroze.

Bajada de Añelo is a 204-km2 (55,000 acres) area, located northeast of Loma Campana, a strategic region in Vaca Muerta that has both shale oil and shale gas resources.

Source: /www.worldoil.com