Argentina's YPF in $550M deal with Petronas to develop shale oil in Patagonia formation

Argentina has reached a deal with Malaysian national oil company Petronas to help develop what is believed to be among the largest shale oil deposits in the world.

State-run Argentine oil company YPF says the deal would use a projected initial investment of $550 million to develop production in the vast Vaca Muerta formation in Patagonia.

In announcing the deal Thursday, YPF said Petronas will provide $475 million in capital for the first phase of the project.

That pilot phase will involve drilling more than 30 horizontal and vertical wells using hydraulic fracturing in the remote Neuquen province starting early next year.

U.S.-based Chevron Corp. previously signed a $1 billion deal to produce oil and gas in Vaca Muerta.