Vista Oil, Trafigura join to develop oil wells in Argentina

Latin American oil company Vista Oil & Gas and Geneva-based Trafigura signed a deal to develop 20 wells in Argentina's Vaca Muerta shale oil deposit, the companies said in a statement. The joint investment is of approximately US $250 million.

They said in the statement that the collaboration represents and important capital investment in Vaca Muerta Shale which is located in the Argentine Patagonia and one of the most important shale formations globally.

The investment will be made in the Bajada del Palo block Oeste, where Vista already has 28 operational oil wells, the statement said.

Trafigura Argentina will invest around $75 million, in which $50 million of that will be used to develop the new wells. The remaining $25 million will be used to buy 20 percent of their eventual production.

Vista will continue to own the entire concession and operate the wells, and will keep 80 percent of the production from the wells, and will contribute 80 percent of the investments.

The agreement "will contribute to generating more production, and thus continue to expand energy exports essential for bringing in the foreign exchange that Argentina needs, while continuing to supply the local market," Vista CEO Miguel Galuccio said in the statement.

Trafigura, which sells more than 6 million barrels of oil per day, owns the Bahia Blanca Refinery in Argentina and Puma Energy, a network of more than 350 service stations.

“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.