Russia and Argentina hash shale gas plan

Russia could soon be drilling for shale oil and gas in energy-hungry Argentina after an agreement was reached this week between two of the nation’s energy giants.

State-run Argentine oil company, YPF recently announced it had made two shale-gas discoveries in Argentina, and one of the discoveries was through a joint venture with Exxon Mobil.

At a meeting in Moscow led by YPF President Miguel Galuccio and Gazprom board president Alexey Miller, the companies also agreed that Russia would export more liquefied natural gas for Argentina.

"It was a positive meeting and another open door to move forward with the ambitious goals we have set for ourselves," said Galuccio, who brought to the meeting Juan Garoby and Pablo Vera Pinto, his top executives for non-conventional resources and international finance.

"Gazprom is the most important gas company in the world and we've found points in common to rapidly explore a shared collaboration,” he added. Galuccio plans to talk to America's major oil companies in the US later this month.

YPF's immediate goals include reversing years of production decline and increasing oil and gas output by 32 per cent in five years. It also hopes to invest USD 37 billion in the world's third-largest shale reserves, after US and China.

Analysts have predicted that YPF can only meet its goals with outside help, but the five-year plan Galuccio unveiled last week would have YPF pay for most of the development by reinvesting its own revenues.

Brazilian energy company, Vale SA in July announced it would partner with  YPF to develop shale gas. YPF accounts for a third of the country's oil production and nearly a quarter of its 120 million cubic meters per day of gas.