Mercuria and Continental Resources Sign Argentina Shale Joint Venture Agreement Outline in August, Plan to Invest Over $4 Billion

en.Wedoany.com Reported - Global energy trader Mercuria Energy Group and U.S.-based Continental Resources have signed a Heads of Agreement (HOA) to form a 50/50 operating joint venture through Phoenix Global Resources, an independent upstream company controlled by Mercuria. Phoenix Global Resources currently operates exclusively in Argentina's Vaca Muerta shale play.

The joint venture will cover six blocks totaling nearly 163,000 net acres, combining Phoenix's interests in Mata Mora Norte, Mata Mora Sur, Confluencia Norte, and Confluencia Sur, along with Continental's operated interests in Los Toldos II Oeste. Under the plan, the parties will also acquire additional assets in the Bajo del Toro Este block from private equity and merchant banking group Integra Capital, Mercuria said in an August 20 announcement.

Continental Resources is the largest privately held oil and gas exploration and production company in the world, active in the Bakken in North Dakota, South Dakota, and Montana, the Anadarko Basin in Oklahoma, the Powder River Basin in Wyoming, and the Permian Basin in Texas. Its international operations are also conducted through joint ventures, including the Vaca Muerta project, as well as a project in Turkey's Dyarbakır Basin with Turkish Petroleum Corp. (TPAO) and Dallas-based TransAtlantic Petroleum.

Mercuria stated that over the past five years, Phoenix, as the sixth-largest crude oil producer in Vaca Muerta, has grown net production from zero to 25,000 barrels per day in its core operating provinces of Neuquén and Río Negro, while having developed only 15% of its held acreage. The joint venture plans to invest more than $4 billion in new capital over the next five years to increase Phoenix's production from 28,000 barrels of oil equivalent per day to over 100,000 barrels of oil equivalent per day, making it one of the largest private operators and producers in Vaca Muerta. The news release stated that the transaction will transform Continental Resources' footprint in Argentina from a standalone player into a co-leader of a mature, fully operational regional platform.

In the United States, Continental Resources and Mercuria are jointly developing the Pecos Power Plant project in West Texas, a 452-megawatt natural gas-fired power station.

Phoenix CEO Pablo Bizzotto said that combining Phoenix's mature operating platform and knowledge of Vaca Muerta with Continental's technical and operational expertise in developing unconventional resources at scale represents an excellent opportunity to build one of the leading independent operators in the basin. Continental Resources President and CEO Doug Lawler added that the reforms led by President Milei and his administration sparked the company's interest in Argentina and strengthened its confidence in the country's future, ultimately paving the way for this partnership. Completion of the transaction is subject to final agreements, satisfaction of closing conditions, and regulatory approvals.

Mercuria noted that the joint venture is expected to qualify for Argentina's Large Investment Incentive Regime (RIGI), which offers tax, customs, and foreign exchange benefits, as well as 30 years of legal and regulatory stability. To be eligible, project investors must invest at least 40% of the agreed minimum investment amount within the first two years.

In mid-August, Argentine state-owned oil and gas company YPF had already applied for RIGI benefits for its $51 billion Argentine LNG project. YPF and its partners, Italy's Eni and XRG, the investment arm of Abu Dhabi National Oil Company (ADNOC), plan to process Vaca Muerta shale gas into LNG for export starting in 2031, using two floating liquefaction units with a combined capacity of 12 million tonnes per year located in the Gulf of San Matías off the coast of Río Negro. YPF stated that the project aims to generate $10 billion in annual export revenue over 20 years. During YPF's Q2 2026 earnings call in August, CEO Horacio Marín reiterated that the final investment decision for the project is expected by year-end. According to the quarterly presentation, YPF has awarded engineering, procurement, and construction contracts for pipelines to transport natural gas to the Atlantic coast, as well as for an integrated natural gas processing plant. YPF is also participating through a processing agreement in the construction phase of Argentina's first LNG export project—the Southern Energy LNG project.

In May, YPF applied for RIGI benefits for a $25 billion oil project aimed at accelerating development of the Vaca Muerta shale formation, a cornerstone of President Javier Milei's strategy to boost Argentina's economy through energy exports. According to BNAmericas, a Latin American energy and business intelligence platform, total proposed energy industry investments currently under review under the RIGI framework amount to $116 billion, covering the following projects: a natural gas liquids production project (TGS, $3 billion), Bandurria Norte (Vista Energy, $5.8 billion), YPF's integrated Vaca Muerta oil development project LLL Oil ($25 billion), El Trapial (Chevron, $13.8 billion), Bajo del Choique-La Invernada (Pluspetrol, $12 billion), Los Toldos II Este (Tecpetrol, $2.4 billion), Loma Jarillosa Este and Puesto Silva Oeste (GeoPark, $1 billion), and the Manuel Belgrano gas pipeline (Gasoducto Manuel Belgrano, $1.5 billion).