YPF, Gazprom sign pact to develop gas projects in Argentina

PABLO GONZALEZ and ELENA MAZNEVA

BUENOS AIRES (Bloomberg) -- YPF SA Chief Executive Officer Miguel Galuccio and his counterpart at Gazprom PJSC, Alexey Miller, have signed an agreement to develop projects in Argentina.

The agreement to develop tight and shale in Argentina sets out the principles for cooperation for a final accord that could be signed in the Russian spring, Sergei Kupriyanov, Gazprom’s spokesman, said after the signing ceremony Friday in Vladivostok, Russia. That may be March, according to the company.

YPF, the state-run energy company, is seeking partners to finance development of a shale formation the size of Belgium that contains at least 23 Bbbl oil, known as Vaca Muerta. Chevron Corp. is now producing 43,000 boed with YPF, while Dow Chemical Corp. is developing gas in an area called El Orejano. Similar deals have been signed with Malaysia’s Petroliam Nasional Bhd. and China Petroleum & Chemical Corp.

The accord will provide “a significant impulse for the development of the republic’s oil and gas industry,” Gazprom Miller said in the statement.

Argentine President Cristina Fernandez de Kirchner and Russia’s Vladimir Putin attended the signing of a memorandum between the two companies in April.

“We clearly said in our business plan that we needed large partners to develop our resources as it wasn’t going to be possible to do it by ourselves,” Galuccio said in an e-mailed statement. “We hope Gazprom becomes a good partner for YPF like Chevron, Dow and Petronas are now.”