Dow Chemical is reportedly weighing a possible exit from Argentina’s most notable shale development.
In 2013, Dow agreed to a jointly invest $190 million into 16 gas wells with the country’s state-run energy company, YPF. According to Bloomberg, the 11,000-acre site called El Orejano now has about 44 wells producing 3 million cubic meters of gas a day.
The country’s energy minister said in an interview that Dow and YPF are examining how to value the asset.
Even if Dow pulls out of the JV, it is still considering other investments in the country.
El Orejano is just one block of the larger Vaca Muerta basin. The area, which is about the size of Belgium, is thought to hold one of the world’s largest reserves of oil and gas. The basin remains mostly undeveloped, however, due to the high cost of production and labor.
Argentina’s current president has been working to change that in recent year, and the country has been aggressively subsidizing oil and gas investments at Vaca Muerta.
According to Reuters, the country now expects between $12-15 billion in investments next year and $20 billion annually starting in 2019.
The JV between Dow and YPF is one of the few investments that has moved from the pilot phase to development.
Argentina is hoping to attract even more investors to tap into the country’s oil and gas reserves while it works to transition from being an energy importer to potentially an exporter.