ExxonMobil Finds Promising Shale Oil Deposit in Argentina

ExxonMobil Finds Promising Shale Oil Deposit in Argentina

The huge deposit that the company is exploring, called Vaca Muerta, ranks Argentina second in the world for shale gas reserves and fourth for potential shale oil reserves.

BUENOS AIRES -- ExxonMobil (IW 500/1) said Wednesday it has found a promising shale oil deposit in southern Argentina, on par with some of the best of its kind in the United States.

The oil giant started work last year in Vaca Muerta, in Neuquen province, in the southern Patagonia region. Vaca Muerta is a huge deposit that ranks Argentina second in the world for shale gas reserves and fourth for potential shale oil reserves.

"It is a very important (potential) well, in terms of likely volume, on a par with the best (non-conventional) in the United States," said industry expert Eduardo Barreiro.

Testing of the nonconventional well, which would require fracking, showed potential for a flow of 770 barrels per day, the company said.

A judge earlier this month said President Cristina Kirchner could be investigated for abuse of authority in a major Chevron fracking deal.

Chevron and YPF also this month unveiled plans to spend another $1.6 billion to develop the Vaca Muerta shale formation for oil and gas projects.

The cheap resource is causing upheaval on world markets in what the International Energy Agency describes as an energy revolution.

But critics point to studies that show fracking increases the risk of contaminating drinking water, warning of untold dangers to humans and livestock.

Kirchner is keen to get Argentina from spending billions of dollars on energy imports every year to self-sufficiency. State oil giant YPF has dug 184 wells and is on target to have 300 open by year's end.

The country's energy import costs hit $9 billion last year alone. The massive energy bill is a top economic concern, because Argentina is losing its hard currency reserves by buying imports.

Copyright Agence France-Presse, 2014

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