The Argentine energy company YPF signed a memorandum of understanding with DOW Argentinia, a company of the American Group The Dow Chemical Company, to develop shale natural gas in the country. YPF said the deal is for shale reserves in more than 10,000 acres in Vaca Muerta in the Neuquén province.

Through this agreement, Dow and YPF will enter into exclusive negotiations to agree the terms and final terms of a joint venture between both companies where YPF yields 50 % of its share to the development of the area “El Orejano”, which comprises a total area of 41 km² (10.131 acres). Initially, the commitment would cover the development of the first pilot project of shale gas in the Argentina.

The U.S. Energy Department’s Energy Information Administration estimates that Argentina has 774 trillion cubic feet of technically recoverable shale gas resources, the third most in the world. YPF announced the recent discovery of 150 million barrels worth of shale oil.

• YPF (Yacimientos Petrolíferos Fiscales), Buenos Aires, Argentinia