Argentina's state-run energy company YPF said Thursday it has finalized a deal with Norway's Statoil to jointly explore and develop a block targeting Vaca Muerta, the country's largest shale play.
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Statoil will take a 50% stake in Bajo del Toro, a 38,800-acre block in the southwestern province of Neuquen, home to most of the play's acreage, YPF said in a filing with the Buenos Aires Stock Exchange.
YPF said it will retain the rest of the shares in the block and continue as the operator.
The companies first agreed to the project last August, pending further evaluation on both sides.
The final step now is for YPF to get approval from the Neuquen government to farm in 50% of Bajo del Toro to Statoil, YPF said. It did not say how long this could take.
Once the project starts, Statoil will pay $30 million to YPF and handle the $270 million in capital expenditures.
The project calls for drilling an initial two horizontal wells in the first phase and another six in the second phase, as well as building well-site infrastructure, YPF said.
Bajo del Toro holds light shale oil, YPF has said.
YPF is the busiest player in Vaca Muerta, one of the world's largest shale plays. It is betting on the play for long-term oil and natural gas production growth, after expected 3.5% decline last year in overall hydrocarbon output.
YPF has entered into joint ventures with Schlumberger and Shell on Vaca Muerta pilots, and with Argentina's Petrolera Pampa, BP-controlled Pan American Energy, Total and Wintershall on others.
For Statoil, this is its first onshore project in Argentina, and its second partnership with YPF.
In 2016, the companies teamed up to study 89 million acres of offshore acreage stretching from Argentina's northern maritime border with Uruguay to the 45th parallel, just to the north of Comodoro Rivadavia, Chubut.