BUENOS AIRES (Reuters) - Exxon Mobil Corp could invest more than $10 billion in shale projects over 20 to 30 years in Argentina’s Vaca Muerta region, the government said on Friday.
The project, currently a pilot program being developed with Exxon’s subsidiary XTO Energy [XEII.UL] and Gas y Petroleo de Neuquen, “could require an additional investment of more than $10 billion,” Exxon Chairman and Chief Executive Officer Rex Tillerson was quoted as saying after a meeting with President Mauricio Macri, the president’s office said in a statement.
The company has already invested $200 million in exploratory drilling in the region, a 30,000-square-km (11,600 square-mile) section of Neuquen province which could contain the world’s largest shale reserves.
Neuquen province estimated last year that Exxon’s investment in the region could reach $13.8 billion.
The government calculates Vaca Muerta would need total long-term investment of $200 billion to reverse Argentina’s sustained energy crisis, which is requiring costly crude, refined products and gas imports and often leads to shortages and blackouts.
Macri, who took office in December, has promised to reduce the state’s role in Latin America’s third-biggest economy and open it up to investors, while battling high inflation and a fiscal deficit.
Tillerson, who met with Macri on Thursday, was quoted by the presidency as saying “I’m optimistic about the changes that have happened in Argentina with the new government ... Clearly it’s improving the investment climate.”
Reporting by Julia Symmes Cobb and Maximiliano Rizzi; Editing by Marianna Parraga and James Dalgleish