By TAOS TURNER
BUENOS AIRES -- Argentina's state-run oil company YPF has
signed a preliminary agreement to form a joint venture with Dow
Argentina, the local unit of Dow Chemical, to explore for shale
The companies now enter into talks on how to work out the
final details of a deal to uncover unconventional gas in the
so-called Orejano block in Argentina's resource-rich Neuquen
Neither company said how much it plans to invest in the project.
"The agreement between both companies is fundamental for the
development of shale gas in the country...," YPF said in a
statement late Tuesday.
Dow Argentina and YPF also agreed to work together to come
up with ways for further develop the petrochemical industry in Argentina.
Argentina ranks third in the world, behind China and the US, in
potentially recoverable shale-gas reserves, with 774 trillion
cubic feet, according to a study by the US Energy Information
Administration. Argentina also has large quantities of shale
Argentina stopped exporting gas in 2004 to ensure it had
enough gas to meet domestic demand that was rising alongside
its then booming economy.
But demand for gas grew at a faster pace than production,
turning the country into a net importer and requiring the
government to spend billions a year on imported energy. YPF is
attempting to reverse this trend and put Argentina on a path to
energy independence by investing in exploration and production and
getting other local and foreign companies to do the same.
Dow Jones Newswires