Total has approved the development of the first phase of the operated Aguada Pichana Este licence in the Vaca Muerta shale formation, Argentina.
The group will also increase its interest in the licence from the existing 27.27% to 41%.
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Total exploration and production president Arnaud Breuillac said: "Launching this project is a key milestone in the development of the giant Vaca Muerta shale play.
"Total is also increasing its interest in the East part of the Aguada Pichana concession where the results of pilot wells drilled to date have been excellent. The development will benefit from the use of existing facilities, enabling the production of shale gas at a very competitive cost.
“This is one of the ten major projects that exploration and production plans to sanction in 2017-2018, taking advantage of the favourable low-cost environment, which is now approved and will contribute to the group’s production growth beyond 2020.”
The gas produced from the project will be treated at the Aguada Pichana gas plant, which will reach its full capacity of 16 million cubic metres per day (100,000 barrels equivalent per day).
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By GlobalDataTotal’s decision follows the announcement by the Argentine Ministry of Energy and Mines of the 'Programme for Stimulation of Unconventional Gas Developments', which guarantees gas prices until 2021.
Aside from Total, other partners in the project include YPF, Wintershall Energia, and Panamerican Energy.
The partners have signed a memorandum of understanding that includes an increase of Total’s participation to 41% in the Aguada Pichana Este project.
This agreement requires approval of Neuquen Province authorities.
In 2016, Total produced 78,000 barrels of oil equivalent per day in Argentina.
