Vista Oil & Gas and Trafigura Argentina announced the signing of a joint investment agreement for the development of 20 oil wells in the Bajada del Palo Oeste block. This joint investment of approximately USD250 million represents an important capital investment in Vaca Muerta Shale which is located in the Argentine Patagonia and one of the most important shale formations globally.
Vista, the third largest crude producer in Argentina and the second largest shale oil operator in the country, has operated the Bajada del Palo Oeste block for over two years. This is the first strategic agreement that Vista has made with another company to accelerate the development of its main shale oil block which has 28 wells currently in production.
Trafigura is one of the world’s leading independent commodity trading companies, trading over six million barrels of oil per day. In Argentina, Trafigura owns and operates the Bahía Blanca Refinery, the Campana terminal and Puma Energy’s network of more than 350 service stations and 50 agroservices.
Trafigura will invest around USD75 million - of which USD25 million are a purchase price for the 20 percent participation in the production of the wells covered by the agreement, and the outstanding amount the contribution of 20 percent of the investment for their development.
Vista will be the operator of the wells, will keep 80 percent of the production from the wells, and will contribute 80 percent of the investments.
"This agreement further validates the performance of our company and the excellence of its management team, which has allowed us to lead the development in Vaca Muerta and to be the partner of choice of a global company for the development of shale in Argentina, with safe, efficient and sustainable operations,” highlighted the President and CEO of Vista, Miguel Galuccio.
“It will also help to generate more production, and thus continue to expand energy exports that are essential for generating foreign exchange that the country needs, whilst preserving and always supplying the local market,” concluded Miguel Galuccio.
“This alliance allows us to strengthen our business in Argentina and integrate the supply of crude oil for our refinery and the subsequent supply of fuels for our network of service stations, wholesale clients and the export market to neighboring countries,” said Martin Urdapilleta, General Manager of Trafigura Argentina. “Our strategic agreement with Vista will contribute to the development of Vaca Muerta, continuing its operational excellence and compliance with the highest safety and environmental standards. This initiative is part of our ambitious investment plan for Argentina that began in 2013 and that we plan to continue executing during the following years, showing our long-term commitment to the country," concluded Martin Urdapilleta.
Under the same agreement, Vista has committed to supply Trafigura with 380,000 barrels per month of crude oil for its refinery in Bahía Blanca for 18 months.