Statoil and YPF sign an onshore exploration agreement for Vaca Muerta in Argentina
Statoil and Argentina’s leading energy company YPF have entered into an agreement to jointly explore hydrocarbons in the Bajo del Toro block in the Neuquén Basin onshore Argentina.
The preliminary agreement (term sheet) between the companies was signed yesterday in Geneva by Statoil’s executive vice president for Exploration, Tim Dodson, and YPF’s vice president for business development & development engineering, Sergio Giorgi.
Statoil will enter the Bajo del Toro exploration permit in the Neuquén Basin as a partner with a 50 % participating interest, with the operator YPF retaining a 50 % interest. As a consideration, Statoil shall recognize to YPF past cost incurred in the block and fund 100% of the cost of certain future activities in the block (promote). The Bajo del Toro exploration block represents a country-entry for Statoil into Argentina.
“This is a light oil exploration project in a world-class unconventional resource play, the Vaca Muerta formation. The opportunity has an excellent fit with Statoil’s sharpened strategy, and is in line with our exploration strategy of delivering profitable, high-quality resources,” says Tim Dodson.
“We are very pleased to expand our cooperation with YPF, the leading player in the Neuquén Basin, and look forward to work closely with them to unlock the potential in the Bajo del Toro block,” says Dodson.
“Bringing in a new international player like Statoil into the country shows confidence in Vaca Muerta as a promising shale play and in YPF as a leading operator. We are pleased to expand the cooperation between both companies”, says YPF Chairman, Miguel Angel Gutierrez.
The Bajo del Toro exploration permit covers an area of 157 km2 (38,800 acres), located in the Neuquén Basin in the west-central part of Argentina. The Vaca Muerta formation is the main target in the basin. In the next few months, the parties will conclude the final agreements. Prior to closing of the deal, the agreements have to be approved by the Neuquén provincial authorities.
In 2016, Statoil signed a technical study agreement with YPF to map exploration opportunities in a large area of the continental slope offshore Argentina.
The Vaca Muerta geological formation onshore Argentina
- Argentina’s unconventional oil and gas resources are among the world’s largest
- The Vaca Muerta is a geological formation of 30,000 km² located mainly in the province of Neuquén and containing oil and gas found at a depth of more than 2,500 meters. Argentina's Neuquén province is the country's most prolific hydrocarbon basin. The Nequen province is located in the west of the country, at the northern end of Patagonia.
- Vaca Muerta is expected to host major deposits of tight oil (shale oil) and shale gas. According to the U.S. Energy Information Administration, the formation contains 16.2 Bbbl of tight oil (shale oil) and 308 Tcf of shale gas.
- The Vaca Muerta Shale has long been known as a major petroleum source rock for conventional accumulations in the Neuquén Basin, which has had oil production since the 1920s. Vaca Muerta has attracted a number of international oil companies, which are exploring and producing in the country.
YPF is the main energy company in Argentina, with a share in the production of oil and gas of 43% in the local market and 56% in naphtha. YPF is leader in the production of unconventional resources. It is an integrated energy company that generates a varied offer: natural gas, electricity, fuels, petrochemical inputs, lubricants and agro products, among others. It has more than 1500 gas stations that allow the supply the country. www.ypf.com
Statoil is an international energy company present in more than 30 countries. It is headquartered in Norway and employs more than 20,000 people. Statoil is listed on the New York and Oslo stock exchanges. Its mission is to bring energy to a growing population to create value for its shareholders and the communities where the company operates. Statoil's philosophy focuses on the idea that industrial development, led by capable and talented people, can create value for society.