Mendoza govt awards Vaca Muerta block to Wintershall, Total

Thursday, May 17, 2012

Argentina's Mendoza provincial government has awarded an exploration license to German firm Wintershall and Total Austral, the local branch of French major Total (NYSE: TOT), the provincial government said in a statement.

The Ranquil Norte block, located near the city of Malargüe, covers part of the Vaca Muerta shale formation.

The firms have committed US$5mn for exploration on the block over the next three years, after which the license may be converted into a 25-year exploitation license. Environmental approvals must be sought before drilling can begin.

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"After completing the administrative procedures, the company plans to start drilling in 2013," Gustavo Albrecht, managing director at Wintershall Argentina, is quoted as saying.

Albrecht told BNamericas last week the firm is interested in acquiring additional blocks with unconventional potential in the basin.

In March, Mendoza's provincial government awarded an exploration license to Wintershall for an area named CN5, also located close to the city of Malargüe. Wintershall holds 100% of the license on that block.

Total and Wintershall are already exploring shale formations together in the Neuquén basin on the Aguada Pichana and San Roque licenses, alongside Argentine firms YPF and Pan American Energy.

Wintershall expects initial test results from those unconventional exploration projects between May and September this year.