| BUENOS AIRES
BUENOS AIRES May 22 Argentina has won the
"geological lottery" with its 1,000-foot-thick Vaca Muerta shale
oil and gas field in Patagonia, a spokesman for Chevron said on
Thursday, as the U.S. energy giant increases its investments in
The company and state-owned oil firm YPF announced
plans last month to invest an additional $1.6 billion to develop
"The shale play in Argentina is unique because of the rock.
Its thickness. Argentina has kind of won the geological
lottery," Chevron spokesman Kent Robertson told Reuters
on Thursday during a trip to Argentina's capital, Buenos Aires.
Shale formations often resemble layer cakes, with shale
squeezed between layers of unproductive rock.
"But Vaca Muerta is like one big cake, 1,000 feet (305
meters) thick in places, which means one well can be much more
productive," Robertson said.
Some studies indicate Argentina is sitting atop a shale
bounty that could transform the outlook for the Western
Hemisphere's supply and secure the South American country's
energy self-sufficiency for decades.
"What we've seen with YPF has been positive so far. Their
per-well costs are coming down," Robertson added. "And the
provincial governments in the area of Vaca Muerta understand oil
development. They support it. So that's one less barrier."
Many communities object to hydraulic fracturing, also known
as fracking, by which water, sand and chemicals are injected
deep into shale fields to unlock hydrocarbons.
Most big energy companies have struggled with the shale
sector so far. Chevron will hold its annual shareholder meeting
next week in Midland, Texas, in part to highlight its renewed
interest in the Permian Basin in western Texas.
Huge shale reserves exist around the world, but they are
often found in areas without good geological data, exploration
and services companies, public support, pipeline infrastructure
and the sufficient scale to make a success of drilling.
"One of the unique things about Vaca Muerta from an
international perspective is that it is in an area where you've
already got oil industry activity," Robertson said.
"There is already an established oil industry in the region
where the shale is. You've got service companies, you've got
pipelines and infrastructure," he added. "You've got existing
assets that do not need to be recreated. Plus you've also got a
head start in that you have knowledge of the rocks."
Asked what was the key reason behind Chevron's decision to
increase its investment in Vaca Muerta, Robertson answered: "We
like the rock. That's first and foremost. Drilling costs are
coming down and the well results so far were sufficient to
warrant additional investment."
(Additional reporting by Ernest Scheyder in New York; Editing
by Paul Simao)