Argentina's YPF signs oil agreement with Chevron

Recently nationalized Argentine oil firm YPF announced it has signed an agreement with US energy giant Chevron to explore and develop shale oil and gas in the Vaca Muerta reserves of southern Argentina. YPF signed a memorandum of understanding with Chevron "aimed at exploring unconventional hydrocarbon development opportunities in Vaca Muerta," the Argentine company said in a statement. "Unconventional" refers to oil and gas deposits like oil shale, where the hydrocarbons are tapped not by conventional wells but instead must be released by methods like fracking, designed to free the reserves by fracturing the source rock. The 30,000 square kilometer Vaca Muerta (Dead Cow) reserve is located mostly in Neuquen province, in Argentina's southern Patagonia region. YPF already has signed memorandums of understanding with two smaller companies to operate in the reserve. Argentina has the world's third-largest shale-based, unconventional hydrocarbon resources, after the United States and China, according to YPF chief executive Miguel Galuccio. Chevron is already exploiting conventional oil fields in Neuquen province. In May, the Argentine government seized YPF from Repsol, accusing the Spanish oil giant of allowing oil and gas production to lapse and forcing Argentina's oil import bill to rise. YPF produces 34 percent of the oil and 25 percent of the natural gas in Argentina, according to industry figures.