Nov. 30 (UPI) -- Norwegian energy company Statoil said it expanded its footprint in Argentina by becoming the operator at an area near one of the world's largest shale basins.
The company said it was awarded a license in the Bajo del Toro Este area in the Neuquén basin, taking a 90 percent stake and serving as the operator.
"With the Bajo del Toro Este license award we are building our light oil position in a world-class unconventional resource play, the Vaca Muerta formation," Statoil's executive vice president for exploration, Tim Dodson, said in a statement.
Vaca Muerta, located in Neuquén province, is considered one of the best shale basins in Latin America. Analysis from consultant group Wood Mackenzie found parts of the basin are producing on average 646 barrels of oil equivalent per day, representing a mix of oil and natural gas. The study from Wood Mackenzie found production increases will be slow, but advances should accelerate by 2020.
All told, the Vaca Muerta shale contains about 16 million barrels of oil and 308 trillion cubic feet of natural gas. Statoil last year signed a technical study agreement with Argentinean company YFP to map exploration opportunities.
Statoil said Thursday it was committed to tapping one exploration well in Argentina in the next four years.
RBC Capital Markets said shale reservoirs in Argentina may have development costs that are considerably higher than their U.S. counterparts, but higher productivity could offset some of the expense.
Statoil reported adjusted earnings after tax for the third quarter at $2.3 billion, more than double the amount from the same period last year.