Amid protest, US Chevron and Argentina YPF sign shale field pact

17 July 2013 16:43  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Some 120 members of an Argentine indigenous community continue to occupy two Yacimientos Petroliferos Fiscales (YPF)-owned oil wells in protest against Chevron’s involvement in Vaca Muerta, a day after the US oil giant signed a deal to help develop the shale oil and gas fields in Neuquen basin.

Local media reports suggest the occupation, which began on Tuesday morning, is connected to environmental concerns over hydraulic fracturing, or fracking.

A spokesman for YPF said the protest was endangering “the security of workers, the environment and the installations”.

Chevron signed an agreement with state-run YPF late on Tuesday to develop the Vaca Muerta shale oil and gas fields in Neuquen basin.

According to the terms of the agreement, Chevron will invest an initial $1.24bn (€942m) to fund a pilot project that will include the drilling of 100 wells in a 5,000-acre (2,205-hectare) tract in the Loma La Lata Norte and Loma Campana areas of Vaca Muerta.

The deal, signed after seven months of negotiations between the two parties, marks the first major foreign energy investment in Argentina since its government nationalised YPF in May 2012 following a dispute with Spanish parent company Repsol.

“This strategic investment will allow Chevron to take part in the Vaca Muerta, one of the most exciting shale oil and gas plays in the world,” said Chevron vice chairman George Kirkland.

The deal comes a day after Argentina announced an incentive package for companies investing more than $1bn in the country’s hydrocarbons sector.

Argentina has struggled in recent years with dwindling oil and gas production levels and has depended heavily on fuel imports to meet domestic demand.

“This partnership is strategic for the company and for Argentina,” said YPF president Miguel Galuccio. “We are putting into production a resource that can change the energy future of our country.”

($1 = €0.76)

By: Simon West

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