The Vaca Muerta formation located in Neuquén Province in Argentina is supposed to be one of the largest shale formations outside of North America. The discovery was made by Repsol-YPF, but with Argentina’s recent move to nationalize YPF, it leaves the door open for foreign investors, possibly governments, to partner with YPF and help develop the resource.
Here’s what we know about the Vaca Muerta formation so far:
- The Vaca Muerta formation covers a total area of 30,000 square kilometers (km2) or 7.4 million acres.
- The discovery has the potential to increase Argentine hydrocarbon production by 50 per cent by 2019 according to YPF estimates.
- The field needs investment of up to $42 billion to increase production by 50 per cent and will be split at $28 billion for oil production and $14 billion for gas production.
- Initial exploration efforts suggest that there are 927 million barrels of oil equivalent in non-conventional hydrocarbons. An independent study by Ryder Scott, an oil and gas consulting firm confirmed that the Vaca Muerta oil and shale gas formation has more than 21 billion barrels of oil equivalent (BOE).
- Argentina relies on natural gas to meet 51 per cent of its energy needs, and natural gas was also one of the most significant facets of its energy trade deficit in 2011, according to Morgan Stanley analyst Paolo Batori. Vaca Muerta has the potential to make Argentina a net exporter of energy.
Photo: Ryder Scott