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Argentine national oil company YPF and private sector driller Patagonia Oil signed an agreement to jointly develop the Llancanelo block in Mendoza province.
The firms will invest a combined US$54mn over the next 36 months in a pilot project targeting heavy oil resources at Llancanelo, where crude oil and natural gas production currently average 256m3/d and 3,000m3/d, respectively, YPF said Tuesday in a statement.
Through the deal, Patagonia Oil – a subsidiary of recently created oil company PentaNova – will acquire an 11% stake in Llancanelo for US$40mn, with YPF retaining a 50% working interest and operatorship of the block.
Participation stakes are also held by Roch and Alianza Petrolera. Under the new agreement, Patagonia Oil will have "the right to advance with the acquisition" of these two companies' working interests.
YPF cited the experience of PentaNova developing heavy oil projects in Colombia, Canada and Venezuela.