Vista Oil & Gas will serve as the operator of the wells. Credit: Anita starzycka from Pixabay.

Vista Oil & Gas has partnered with Trafigura Argentina to jointly invest around $250m to develop wells in the Vaca Muerta shale basin in Argentina.

The two firms have set up an un-incorporated joint venture towards this goal. The aim is to jointly develop five pads of four wells each in the Bajada del Palo Oeste block, located in the Vaca Muerta basin.

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Vista has marked nearly 550 new well locations in the block, where it currently operates 28 producing wells.

As part of the investment agreement, Swiss commodity company Trafigura’s subsidiary, Trafigura Argentina, will invest nearly $75m.

Of this amount, the firm will spend $25m to purchase a 20% stake in the production of the wells that are part of the agreement.

The remaining amount will be spent on developing the wells.

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Serving as the operator of the wells, Vista Oil & Gas will cover 80% of the investment for the Vaca Muerta development and will be entitled to an 80% share of the production from the wells.

Vista Oil & Gas president and CEO Miguel Galuccio said: “This agreement further validates the performance of our company and the excellence of its management team, which has allowed us to lead the development in Vaca Muerta and to be the partner of choice of a global company for the development of shale in Argentina, with safe, efficient, and sustainable operations.

“It will also help to generate more production, and thus continue to expand energy exports that are essential for generating foreign exchange that the country needs, whilst preserving and always supplying the local market.”

Vista Oil & Gas agreed to supply 380,000 barrels per month of crude oil to Trafigura’s Bahía Blanca refinery in Argentina. It will be supplied for a period of 18 months from July 2021 until December 2022.

Trafigura Argentina general manager Martin Urdapilleta said: “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 neighbouring countries.”