UPDATE 2-Chevron, YPF boost spending to develop Argentine shale
(Adds details on Argentina policy changes, Chevron's Latin America performance)
By Ernest Scheyder and Hugh Bronstein
NEW YORK/BUENOS AIRES, April 10 (Reuters) - Chevron Corp and state-controlled YPF SA plan to spend an additional $1.6 billion to develop Argentina's Vaca Muerta shale formation further, boosting plans for new wells this year and announcing fresh exploration projects.
The project, announced on Thursday, will help Chevron boost its oil and natural gas production, which has been stubbornly flat the past few years despite annual global capital spending of around $40 billion.
It should also help ease concerns about foreign investment in Argentina, which was widely castigated after President Cristina Fernandez expropriated Repsol SA's majority stake in YPF two years ago, and should give the country fresh capital to develop one of the largest energy reserves in the Western Hemisphere.
Since the start of the year, Argentina has made policy changes that have caught the eye of international investors while sparking a rally in local stocks and bonds. The shifts have included heating gas subsidy cuts of 20 percent, an 18 percent currency devaluation and a deal to pay Repsol $5 billion for the YPF nationalization.
Chevron and YPF began drilling in the region last year, with Chevron agreeing to spend $1.24 billion for YPF to drill 161 wells as the project's operator, a deal that was widely seen as a test phase by Wall Street.
Chevron and YPF said on Thursday they would jointly spend an additional $1.6 billion to drill 170 wells this year, up from previous estimates for 140 wells this year.
Additionally, Chevron will spend $140 million to explore the Narambuena region of the Vaca Muerta. Continuación...