Argentina: Shale Oil Formation Requires $250 Billion Investment
Repsol YPF SA’s Argentine unit said $25 billion a year will be needed over a decade to develop shale oil resources at the Vaca Muerta formation in the south of the country, which probably holds about 23 billion barrels.
The estimate comes after further drilling in a Connecticut- sized area of Argentina’s Neuquen province and reviews of the area by independent auditor Ryder Scott, YPF said late yesterday in a statement. YPF, the local unit of Madrid-based Repsol, earlier discovered 927 million barrels of commercially viable oil at the Loma La Lata field, also located in the formation.
YPF, producer of more than half Argentina’s crude, is boosting exploration to arrest output declines amid government criticism that local oil companies are failing to invest in production. The resources at Vaca Muerta compare with the 50 billion barrels of oil Brazil estimates it found underneath a thick layer of salt beneath the seabed and which include the largest fields discovered in the Americas in three decades.
“If the exploration proved to be successful in the whole Vaca Muerta formation and immediate intensive development began in the area, current oil and gas production capacity of Argentina could double in 10 years time,” YPF said in a statement. “It would be necessary to make a vast investing effort that would reach $25 billion per year.”