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Shell to Triple Argentine Shale Spending as Winds Change

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By Pablo Gonzalez and Daniel Cancel: Dec 10, 2013

Royal Dutch Shell Plc (RDSA)’s Argentine unit plans to triple shale investments on prospects that the government will change energy policies to spur development of the Vaca Muerta formation and cut fuel imports.

Shell Argentina will increase its shale capital expenditures to about $500 million next year from $170 million at year-end, Chief Executive Officer Juan Jose Aranguren said. The company that mainly refines crude in Argentina will boost test drilling in Vaca Muerta with a long-term goal of producing light crude from its shale operations, he said.

Argentina will need $300 billion to develop Vaca Muerta in a six-year period that would make the country oil sufficient starting in 2020 and will keep producing for as many as 40 years, Aranguren said yesterday in an interview at his Buenos Aires office. Vaca Muerta, the world’s second-largest shale gas and the fourth-largest shale oil formation, is in Neuquen province in southwestern Argentina.

“Now we feel a different wind blowing and we are assessing our possibility to invest in exploring the resources,” Aranguren said. “When you reach a situation where Argentina is importing 20 percent of its energy needs, a 180-degree change is needed in the energy policy.”

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