The investment is the largest specific project announcement since March in Vaca Muerta, one of the world's largest shale formations, as Argentine President Mauricio Macri's government tries to reduce reliance on gas imports that have strained Argentina's finances.
The provincial government in Neuquen, where Vaca Muerta is located, has agreed to split the Aguada Pichana area into two parts and is also combining it with the Aguada de Castro area, according to a statement.
Total will operate the eastern part of Aguada Pichana with a 41% stake and Pan American Energy will operate the western part as well as Aguada de Castro with a 45% stake.
The partners had already invested $500 million in the areas between 2014 and 2016.
In March, Argentina's Tecpetrol, part of the Techint Group, said it would invest $2.3 billion in the Vaca Muerta shale fields through 2019, marking the biggest announcement related to the formation in years.
That investment came after the government said it would gradually lower the price it guarantees for gas drilled from new wells, currently $7.50/MMbtu of gas, to encourage investment sooner rather than later.
Vaca Muerta contains 308 Tcf of shale gas and 16.2 Bbbl of shale oil, according to the U.S. Energy Information Administration.
