Eni Signs Deal to Acquire 32% Interest in Three Vaca Muerta Blocks

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

Eni is betting on Vaca Muerta's growing natural gas production through a planned 32% stake in three blocks.

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An Ownership Stake for Eni

Italy's Eni is set to enter Argentina's Vaca Muerta shale play after agreeing to acquire a 32% interest in the Meseta Buena Esperanza, Aguada Villanueva and Las Tacanas upstream blocks.

The three blocks will feed YPF's Argentina LNG integrated long-term project, which is aimed at exporting 12 million tons per annum (MTPA) of LNG, with the possibility of expanding it to 18 MTPA. Across the three blocks, Industrial Info Resources is tracking 10 drilling projects and early production facilities across these three assets involving investments of US$380 million.

Overall, Industrial Info Resources is tracking 464 oil and gas production projects in Argentina amounting to investments of US$19.87 billion.

Eni's acquisition is still pending approval from the relevant authorities, but if it goes through, the Italian company will hold 32% of the stake, YPF will hold another 36%, and XRG will hold the remaining 32% of the interests, confirming the deal's ownership split.

Guido Brusco, Eni's chief operating officer for Global Natural Resources, said: "Vaca Muerta is one of the world's richest unconventional basins in terms of resources: our participation positions us across the entire value chain, from Argentine upstream to the supply of LNG to international customers, creating value while contributing to global energy security."

More Upstream Investments

Eni is not alone in its push to invest in Argentina's shale play. In recent months, several companies have also announced significant investments in oil and gas developments. For example, YPF wants to invest US$25 billion to develop several blocks in Vaca Muerta to produce 240,000 barrels of oil per day (bpd).

Similarly, GeoPark also pledged funds to produce 20,000 barrels per day from Loma Jarillosa Este and Puesto Silva Oeste, while Pluspetrol announced investments of US$12 billion to develop the Bajo del Choique-La Invernada assets.

These upstream investments have also gone hand in hand with new midstream developments aimed at boosting the transport of Vaca Muerta's growing shale production.

Among the announced natural gas midstream projects are the export terminals of Argentina LNG and the Southern Energy project, both based on floating LNG infrastructure. Gas pipeline infrastructure has also advanced, including the Reversión Norte and Perito Moreno gas pipelines.

Growing Production

These midstream projects emerge as Vaca Muerta's shale gas output continues to grow. According to Argentina's Secretariat of Energy, Argentina's shale gas production from Vaca Muerta expanded from 1.1% of total output in 2014 to 53.2% by 2025.

In 2025, the South American nation produced 141.37 million cubic meters per day of natural gas, the highest going back to at least 2009, according to Argentina's Secretariat of Energy.

Key Takeaways

• Eni is entering Vaca Muerta through a 32% stake in three gas blocks.
• The deal links Vaca Muerta upstream gas directly to Argentina LNG exports.
• Argentina's shale boom is now moving from production growth to export-scale infrastructure.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).