The government of Neuquen, a southwestern province of Argentina, said Monday it has approved ExxonMobil's investment plan for developing shale resources in the Bajo el Choique and La Invernada blocks.
The company will work with Gas y Petroleo del Neuquen (GyP), the province's state-owned oil company, on the project to invest an initial $229 million in the delineation of the blocks, the government said in a statement.
This will consist of drilling five horizontal wells in the Vaca Muerta play with laterals of up to 2,500 meters (8,202 feet) and 25 frac stages.
The companies will also build an oil separation and storage facility, a natural gas pipeline, among other infrastructure on the adjacent blocks, according to the province.
After this pilot stage, the companies plan to invest an additional $13.8 billion in the mass development of the blocks by drilling 556 horizontal wells, the government said.
Exxon has a 90% stake in the consortium, while GyP holds the rest.
The companies have a 35-year concession for developing the blocks.
Exxon has already invested $200 million in exploring the blocks through XTO Energy, a subsidiary that specializes in the drilling of unconventional oil and natural gas plays. Exxon transferred all of its unconventional assets in Argentina to XTO Energy at the start of 2015.
Exxon has had good results so far in its exploratory drilling, finding shale oil and gas on the Bajo del Choique and La Invernada blocks.
Argentina is betting on the development of Vaca Muerta to turn around a 20% decline in oil and gas production over the past decade that has slashed energy exports and pushed up imports. The country holds 27 billion barrels of shale oil resources and 802 Tcf of shale gas, far more than its proved conventional reserves of 2.5 million barrels of oil and 12 Tcf of gas, according to the US Energy Information Administration.
