YPF and Shell to partner in Bajada de Añelo

Argentinian NOC YPF and Shell received regulatory approval on Tuesday from the Neuquén provincial government to move forward on a joint pilot project in the Neuquén Basin.

The province has authorised the transfer of a 50% operating stake in the Bajada de Añelo block to the super-major’s subsidiary, O&G Developments. Under the terms of the deal, initially signed by the two companies in February, YPF will hold a 35% interest, while its own subsidiary, YSur, will take on a 15% stake.

The companies have planned for a USD 44-million, two-phase pilot programme at the block, involving the drilling of 150 wells. The objective is to reach daily production of 6 mcm (212 mcf) of gas and nearly 19,500 barrels of oil.

“Both YPF and Shell have other concession areas and have reached this agreement to accelerate the development of hydrocarbons activity, generating more work, more investment and more production,” Neuquén Governor Omar Gutierrez said following the approval.

“It also allows [us] to take steps in the line with achieving energy self-sustainability, [reaching] gas equilibrium and strengthening macroeconomic, energetic and social development in the province of Neuquén.”

Work at Bajada de Añelo is expected to culminate in investments worth USD 2 billion over the next decade.