Argentina's shale gets mixed reviews

Sept. 26, 2013 at 8:06 AM

WASHINGTON, Sept. 26 (UPI) -- The shale natural gas potential in Argentina is good though the sector may be hampered by the lack of foreign investment, analysts said.

U.S. energy company Chevron Corp. in July said it signed an agreement with Argentine oil company YPF to develop shale oil and natural gas reserves at the onshore Vaca Muerta formation. Energy consultant group Wood Mackenzie described the Vaca Muerta region as one of the best shale reserve areas in the world

Ed Morse, head of commodities research at Citigroup, said he was upbeat about Argentina's potential despite a nationalist trend in the energy sector.

"I'm semi-optimistic," he was quoted as saying Wednesday by the Platts news service, the energy division of publisher McGraw Hill.

Chevron in July said it would spend $1.5 billion in a 100-well program in the Vaca Muerta field. David Mares, a professor in Latin American studies at the University of California-San Diego, described the government's energy policies as "erratic."

"Some of the specifics of shale make it more likely that can happen in a risky political environment, because the returns are fairly quick on a shale gas well, but there are still a number of issues there," he was quoted as saying.

Mares compared Argentina to Venezuela, which has seen oil production falter because of nationalism.

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