China's CNOOC Expected To Sign Oil Pact With Argentina

August 23, 2013

Bernama reports that YPF, the energy company in which Argentina holds a majority stake said its next shale oil and gas partnership will be with a group including China' National Offshore Oil Corporation Ltd (CNOOC). A deal is expected to be signed sometime next month.

China's biggest offshore energy explorer "probably will sign next month a definitive deal to explore and develop deposits in the Vaca Muerta formation, either as part of its Bridas Corp. joint venture with the billionaire Bulgheroni brothers or with the Bridas-run Pan American Energy LLC", YPF board member Hector Valle said in an interview.

An agreement with Cnooc and Bridas would be YPF second binding shale partnership in the 16 months since President Cristina Fernandez seized a majority control of the company from Spain's Repsol.

Argentina is counting on companies including Chevron, which signed the first YPF shale deal last month, to help develop Vaca Muerta and boost gas reserves that now stand at just six years of consumption, Valle said.

"We have gas for six years, when the ideal is reserves for 10," Valle pointed out, but "to develop the shale projects will require at least four or five years to start adding reserves, so the clock is ticking."

"As soon as Chevron is fully approved by Neuquen province, the door will be open to immediately seal new partnerships" said Valle adding that "after the Americans, it will be the turn of China, either with the Bulgheronis directly or via Pan American. That's been discussed."

Copyright, Bernama, 2013.