SAN RAMON, Calif., July 17 (UPI) -- Shale oil and natural gas developments in Argentina will help Chevron meet its medium-term production targets, the U.S. energy company said.
Chevron announced it signed an agreement with Argentine oil company YPF to develop shale oil and natural gas reserves at the onshore Vaca Muerta formation.
Chevron said the deal calls for a $1.24 billion investment in the first phase of development, which calls for the drilling of 100 wells on a 5,000-acre tract.
Chevron's existing assets in Argentina have produced, on average, 21,000 barrels of crude oil and 4 million cubic feet of natural gas.
Chevron Corp. Vice Chairman George Kirkland said the investment in Argentina gives his company access to a promising shale reserve.
"It provides Chevron with a new opportunity to profitably grow production beyond our 2017 production target of 3.3 million barrels per day," he said in a statement Tuesday.
Energy group Wood Mackenzie described the Vaca Muerta region as one of the best shale plays in the world. The U.S. Energy Department's Energy Information Agency ranked Argentina third in the world in terms of shale resources.