Chevron, YPF to Sign $1.5 Billion Deal to Develop Shale in July

Chevron Corp. (CVX) will become the first major oil company to partner with YPF SA to develop shale oil and a final deal is expected in July, YPF said.

Miguel Galuccio, chief executive officer of YPF, and Ali Moshiri, Chevron’s head of Latin America, Middle East and Africa, visited the Patagonia shale formation today and met with Neuquen’s governor Jorge Sapag, according to an e-mailed statement today from the Buenos Aires-based company.

Jim Craig, a spokesman for San Ramon, California-based Chevron, didn’t immediately replied to a call and an e-mail seeking comment.

Moshiri, who in December signed with Galuccio an exclusive right to negotiate final terms for YPF to transfer a 50 percent interest in Loma de la Lata Norte and Loma Campana, was “surprised” with the advanced state of YPF exploration projects, according to the statement. The fields for the $1.5 billion joint venture comprise an area of 290 square kilometers (180 miles) in southwestern Argentina.

“Along with Chevron, we will constitute the first joint venture to develop shale,” Galuccio said.

YPF is pumping 7,000 barrels a day, according to the e-mailed press release. Vaca Muerta, which means “dead cow” in Spanish, holds at least 23 billion barrels of oil equivalent, according to a report by independent auditor Ryder Scott released in February 2012 by YPF. Argentina holds the world’s third-largest shale gas reserves, according to US Energy Administration data.

To contact the reporter on this story: Pablo Gonzalez in Buenos Aires at pgonzalez49@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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