French supermajor Total is planning to invest $850 million to develop a deep-water natural gas field off the southern coast of Argentina, according to a report.
The company unveiled its plans at a public presentation in Buenos Aires on Wednesday, saying it would partner with Germany’s Wintershall and local company Pan American Energy to develop the Vega Pleyade field.
The trio will drill three horizontal wells with the aim of producing up to 10 million cubic metres per day of gas at the field, located in South Atlantic waters near the Patagonian province of Tierra del Fuego.
The field is expected to start producing toward the end of 2015, Reuters cited Total official Javier Rielo as saying.
At full production, it would bring Total’s overall production in the area to 18 million cmd, the company added.
“In a context of growing demand for energy in Argentina, this new development confirms the group’s commitment to provide the country with gas over the long-term,” Ladislas Paszkiewicz, head of production and exploration for Total in the Americas, said in the statement.
Total will operate the project with a 37.5% stake. Wintershall will also hold a 37.5% interest while Pan American will hold the remaining 25%.
Pan American is 60%-owned by UK supermajor BP. The remaining 40% is split between Argentina’s Bridas Energy Holdings and Chinese state company CNOOC.
Upstream reported last month that Total had signed up one of Noble’s newbuild jack-up rigs for a 10-month contract in Argentina, indicating that the company was planning more offshore drilling in the region.
Argentina has received relatively little investment in offshore exploration and production. Most of the recent interest in its energy sector has focused on unconventional shale oil and gas in the province of Neuquen.
US major Chevron recently agreed to invest about $1.2 billion to develop shale energy along with Argentine state-run oil company YPF.