Argentina province to auction rights to Vaca Muerta shale in March
BUENOS AIRES, Sept 5
BUENOS AIRES, Sept 5 (Reuters) - A province in Argentina will auction in March the international rights to tap part of the Vaca Muerta shale oil and gas formation, considered one of the biggest in the Western Hemisphere, local media reported Thursday.
The Neuquen province, home to most of Vaca Muerta, will auction a 500 square kilometer swath of the formation, after firms that won concession rights there in 2008 failed to follow through with investments, the energy minister of the Patagonia district, Guillermo Coco, reportedly said.
"We are talking about organizing an international auction of areas on Vaca Muerta," Coco was quoted as saying by local daily Rio Negro. "We want to get a feel for the market even though we know about the interest that's there."
A spokesman for Coco confirmed that an auction is planned in March.
The massive deposit of unconventional resources has been in the international spotlight since its potential was discovered, but some global firms are uneasy about making big investments in Argentina because of interventionist economic policies.
The administration of President Cristina Fernandez seized the energy firm YPF from Repsol last year, claiming the Spanish company had not invested enough in Argentina.
YPF operates in 3 million net acres of Vaca Muerta and has estimated that the entire formation contains 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas.
Coco did not specify which companies lost their concessions in Neuquen, but said they may be able to hold onto some development rights.
Argentina's districts have the authority to cancel concessions if operators do not follow through with planned investments.
In July, U.S. oil company Chevron Corp signed an agreement with YPF to invest $1.24 billion in Vaca Muerta - the first major investment announced in Argentina's petroleum sector since the YPF's nationalization.
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