Chevron confirms partnership with YPF to exploit Vaca Muerta

The pilot project until March 2014 involved an initial outlay of 1240 billion dollars (fully funded by Chevron) that allowed the development of 20 km2 and the drilling of 161 wells

Chevron decided to continue its partnership with YPF to advance the stage of mass development of unconventional hydrocarbons in Vaca Muerta, having successfully completed the pilot project started last year. This was announced by chairman and CEO of YPF, Miguel Galuccio after informing the Board of the company.

Galuccio Chevron welcomed the decision: "We are pleased they have chosen to continue this partnership; It is a great demonstration of confidence in the work of YPF and the potential of unconventional hydrocarbons from Argentina. "

This post-pilot phase, during which YPF will remain the operator, will include the drilling of 170 additional wells this year, with a combined investment of more than 1600 million in drilling, completion and construction of production facilities.

"Last year we said that was a strategic and long-term partnership. This continuity of work and exploitation project launched only serve to confirm that we choose the right partner and to the extent that today need YPF and the country, "said Galuccio.

The agreement between YPF and Chevron is the most important achieved to date for the development of non-conventional hydrocarbons in the country.

The pilot project until March 2014 involved an initial outlay of 1240 billion dollars (fully funded by Chevron) that allowed the development of 20 km2 and the drilling of 161 wells.

"YPF is a reliable partner and operator, the project is moving in the right direction," meanwhile Ali Moshiri, president of Chevron Africa and Latin America. "We are pleased with the progress and hope to continue to provide our technical expertise and investment to help Argentina to achieve the goal of energy self-sufficiency," he said.

Each year will hold a budget projection up to the total development of the area. The cluster is committed to an area of ​​395 km2, with an estimated population of more than 1500 wells to reach a production of more than 50 billion barrels of oil and 3 billion cubic meters of natural gas per day associated drilling, making it the main asset YPF productive and potentially Argentina.

This first collaboration, enabled us to identify the best places to drill ("sweet spots"), significantly reduce the time and hence the cost of drilling. Regarding costs, the company achieved a significant improvement: in two years down the vertical well cost $ 11 million to the current average, which is around 7.5 million.

The total area of ​​Vaca Muerta is about 30,000 km2, of which YPF has a net equity equal to 12,000 km2. Today, YPF has 19 rigs in the area of ​​Loma Campana and over 20,000 equivalent barrels of oil are extracted.

Chihuido exploratory joint project of the Sierra Negra

Additionally, the expansion of the strategic agreement between the two companies announced today with the aim of delineating a future cluster development of oil shale exploration program with 9 wells (7 vertical and 2 horizontal), which will begin in Narambuena, an area of 200 km2 in the province of Neuquén, in the Chihuido grant of Sierra Negra.

This exploratory project further comprises applying methods of geophysical prospecting and mapping of surface and subsurface, allowing locate environments for the accumulation of petroleum or natural gas and determine the best methods for removal.

The estimated investment for the exploratory project is 140 million dollars and will be provided entirely by Chevron. This phase, during which YPF will also be the operator, will be completed in an estimated four-year term, although times may be accelerated according to the results.

traslation: Belén Zapata