April 9 (Bloomberg) -- Petroleo Brasileiro SA, the largest oil company in Latin America by market value, said Argentina needs clear rules to foster investments if it wants to develop its unconventional oil and natural gas resources.
A clear investment environment is needed to lower “the risks” of investing in production of tight and shale gas and oil in Argentina, Paulo Aquino, the Rio de Janeiro-based oil producer’s executive manager for Latin America, said in a presentation at the Arpel conference in Punta del Este, Uruguay. Petrobras, as the company is known, is looking to increase production of so-called unconventional resources in Argentina, he said.
Argentina last year nationalized YPF SA, the country’s largest oil company, by seizing 51 percent of its shares from Repsol SA in an attempt to reverse years of declining output. YPF holds the bulk of Argentina’s shale resources. The Vaca Muerta formation in southern Argentina is estimated to hold at least 23 billion barrels of oil equivalent, according to a survey by Ryder Scott.
Petrobras Argentina SA, as the Brazilian state-controlled oil producer’s local unit is called, finished drilling its first shale oil well in March at Vaca Muerta. While the company is analyzing results from the well, it’s already producing tight gas after having drilled 29 tight gas wells in three basins, Aquino said.
Petrobras is talking to potential buyers to sell part of its interest in two exploration blocks in Uruguay, Aquino said. Petrobras is selling foreign assets to focus investments in Brazil, where the company has found the largest discoveries in the Americas since 1976.
The company has 40 percent stakes in two licenses in Uruguay -- Block 3 and Block 4 in the Punta del Este basin off Uruguay’s coast -- and plans to reduce its ownership to as low as 15 percent, Aquino said.
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