The Argentine province of Neuquén granted U.S. oil company Chevron Corp. a new concession for shale exploitation in the Vaca Muerta formation, with a pilot stage investment of $78.7 million, the local government said in a statement on April 11.
The company obtained the concession as operator and holder of the 282.8-sq-km El Trapial Este block.
The Vaca Muerta shale formation, which is the size of Belgium, is the world’s fourth-largest shale oil reserve and the second largest for shale gas. Its development is key for Argentina to reverse its massive energy deficit at a time when it needs to preserve its scarce central bank international reserves.
“We are very excited to begin this new phase in our historic field, and we look forward to continuing to strengthen our commitment to the community and our presence in the country,” Eric Dunning, Chevron managing director in Latin America, said in the statement.
In the three-year pilot stage, the company plans to invest $65.7 million to drill, complete and commission five horizontal wells of between 2,500 m and 3,000 m and 38 to 46 frac stages each. In addition, it will invest $13 million in infrastructure.
“We are connecting Neuquén with the world. This implies a new development in the northern area of Vaca Muerta, generating new jobs,” Neuquen Governor Omar Gutierrez said.