Shale boom expected in Argentina

BUENOS AIRES, Dec. 13 (UPI) -- Argentina is expecting a shale oil and natural gas boom following speculation of a major discovery by former state monopoly YPF, an executive said.

Tomas Garcia Blanco, executive director for upstream activity at YPF, told the Financial Times he was cautiously optimistic about the potential for a 1 billion barrel discovery in the country.

"I would like to be cautious," he said. "We hope to know by the end of the year or January 2012."

In November, Spanish energy company Repsol, which owns a majority stake in YPF, said exploration in the Loma La Lata area of Argentina uncovered 927 million barrels of oil equivalent, of which 741 million barrels are oil.

The company drilled 15 vertical wells, which produced an initial 5,000 barrels of oil per day of what the company described as high-quality shale oil.

Energy group Wood Mackenzie described the region, known as Vaca Muerta, as one of the best shale plays in the world.

Garcia Blanco said estimates about the resource potential in Vaca Muerta were "conservative." The reserves there are similar to the lucrative Eagle Ford shale play in Texas, he said.

"It does seem to have some similarities to some very productive U.S. plays," Robert Clarke, an unconventional gas analyst at Wood Mackenzie, told the Financial Times.

The U.S. Energy Information Agency ranked Argentina third in the world in terms of shale resources.