Vista Energy has reached an agreement with Trafigura Argentina to invest in the Vaca Muerta oil project in Argentina.

In 2021, the two firms formed a joint venture (JV) to develop 20 wells in Vista’s main oil development concession in the Vaca Muerta shale reserves.

Under the new investment deal, the firms will develop three pads, or oil well zones, on Vista’s Bajada del Palo Oeste concession.

According to Reuters, the two firms will invest $150m in the Vaca Muerta basin.

Trafigura will have a right over 25% of the production of the pads covered under the agreement, and will also incur 25% of the development costs.

Vista will contribute 75% of the total costs and will retain 75% of rights over the hydrocarbon production.

Vista and Trafigura have also extended their prior crude and oil purchase agreement by 12 months.

Under this agreement, Vista will sell 380,000 barrels of crude per month to Trafigura during the first half of 2023, and 345,000 per month during the second half.

Vista expects the deal to help in generating the funds needed to accelerate its investment in infrastructure at Vaca Muerta, reduce debt, and return capital to shareholders through dividends or buy-backs.

In a press statement, Vista said: “The agreement allows the company to further consolidate its relationship with Trafigura as a strategic partner.”

As of the end of 2021, Vista’s Bajada del Palo Oeste development had proved reserves of approximately 155 million barrels of oil equivalent.

To reduce costly imports, Argentina is considering boosting production at the Vaca Muerta shale formation, reported Reuters.