Argentina’s state-owned oil and gas group YPF and Dow Chemical’s Argentinian subsidiary PBB Solisur plan to invest $500 million to triple production at their existing shale gas joint venture.

The partnership exploits reserves in the El Orejano block of the Vaca Muerta shale formation in Argentina’s southwestern province of Neuquen. The new investment would involve drilling 30 new horizontal wells block – currently 19 wells are in play – and would increase output to 2 million m³/d by the end of 2016 from a current 750,000 m³/d.

Dow and YPF have been working together since 2013 on the country's first large-scale shale gas project and have already invested $350 million. To fully develop the 45 km² block, expenditure could eventually rise to $2.5 billion, according to YPF chief Miguel Galuccio.

“We are seeing extraordinary results, Galuccio said. Alluding to Dow, he added: “It encourages us that a leader in the petrochemical industry trusts YPF for its first upstream development.”