Argentina's biggest energy firm YPF has announced that it had found nearly a billion barrels in unconventional energy resources in Patagonia. YPF is the Argentine unit of Repsol YPF SA, Spain's largest oil group.
The new probable reserves in Patagonia are contained in an area of 428 square kilometers in Loma La Lata, more than 1,200 kilometers (746 miles) southwest of Buenos Aires.
This discovery will make Argentina the world's third-largest probable reserves of shale oil, behind the U.S. and China. The shale gas development in Argentina could help the South American nation stop being dependent on expensive gas imports in five or six years.
Tomas Garcia Blanco, the company's head of exploration and production, said that YPF could produce 50,000 barrels of oil per day from its shale discovery within four years.
Repsol would continue to spend more on exploration, and it´s too early to estimate how much it might invest in production of the new fields, said spokesman Kristian Rix Wednesday. Repsol owns a 57 percent stake in YPF.
Argentina has been forced to import more fuel to meet its needs in recent years. YPF, which produces more than 50 percent of Argentina's crude, is boosting exploration to arrest a decline in output. We are carrying out an exploration campaign in the rest of the basin so, let's say in 18 months to 24 months, we will know really how much of these 400 square kilometers we can replicate in these 30,000 square kilometers, said Blanco.
Repsol said that the shale oil would be extracted through the use of hydraulic fracturing. The concentration would be upon drilling a 50 square km area using five rigs according to the first phase of the project. Since there was already an infrastructure in existence, drilling new wells was a relatively fast process, he added.
With the announcement of this major oil find, Argentine stocks posted strong gains Tuesday. Though Repsol YPF SA is based in Spain, it conducts operations in over 30 countries worldwide.