Petrobras Argentina Extends Concession in Vaca Muerta

Petrobras Argentina has an agreement to extend a shale gas concession for 35 years in the South American country's Vaca Muerta region.

According to a securities filing, the plan would include a five-year pilot project to develop so-called tight gas by drilling 24 wells.

Omar Gutiérrez, governor of Neuquén province, said on Wednesday Petrobras would invest an initial $346 million to develop the Punta Rosada and Lajas formations with potential long-term investments of $2.5 billion.

Argentina's center-right President Mauricio Macri calculates Vaca Muerta, which could contain the world's largest shale reserves, would need total long-term investment of $200 billion to reverse Argentina's sustained energy crisis.

The country is importing costly crude, refined products and gas and often sees shortages and blackouts.

Brazil's state-run oil firm, known formally as Petroleo Brasileiro SA said in May it was selling a majority stake in Petrobras Argentina SA to Argentina's Pampa Energia .