Post date: Mar 28, 2013 5:14:37 AM

By Taos Turner: Published March 26, 2013: Dow Jones Newswires

Argentina's state-run oil company YPF SA (YPF, YPFD.BA) has signed a preliminary agreement to form a joint venture with Dow Argentina, the local unit of Dow Chemical Co. (DOW), to explore for shale gas.

The companies now enter into talks on how to work out the final details of a deal to uncover unconventional gas in the so-called Orejano block in Argentina's resource-rich Neuquen province.

Neither company said how much it plans to invest in the project. "The agreement between both companies is fundamental for the development of shale gas in the country..." YPF said in a statement late Tuesday.

Dow Argentina and YPF also agreed to work together to come up with ways for further develop the petrochemical industry in Argentina. Argentina ranks third in the world, behind China and the U.S., in potentially recoverable shale-gas reserves, with 774 trillion cubic feet, according to a study by the U.S. Energy Information Administration. Argentina also has large quantities of shale oil.

Read more: http://www.foxbusiness.com/news/2013/03/26/argentina-ypf-dow-chemical-unit-announce-joint-venture-plan/#ixzz2OoBUd1wt