Argentina’s state-controlled oil company YPF has begun drilling three new exploratory wells in Palermo Aike, the country’s second-largest unconventional hydrocarbon reserve after Vaca Muerta.
According to a statement from the government of the southern province of Santa Cruz, the company started construction of the three wells with a total investment of $200 million.
“These are three sites that will require a lot of work, and this is a huge operation. We are talking about a $200 million investment,” said Santa Cruz Governor Claudio Vidal.
Drilling of the first exploratory well in Palermo Aike began in September 2023 and was completed in May 2024 with an investment of $28 million.
Covering 12,600 square kilometers, Palermo Aike holds estimated resources of 10 billion barrels of oil equivalent, about one-third the size of Vaca Muerta.
Due to its geological characteristics, Palermo Aike is considered the formation most similar to Vaca Muerta, given its spatial extension, target depth (between 3,000 and 3,500 meters), marine origin, and potential.
