Argentina could be nearing a shale oil and gas boom similar to the one that transformed the US energy landscape as former state monopoly YPF eyes another 1bn barrel discovery adjacent to a Patagonian field whose reserves were more than six times bigger than thought, FT reports.

YPF has almost finished drilling a 502 sq km area just north of the discovery zone and believes full results will be equally vast. Two of the three wells are in production and “the yield is exactly the same,” says Tomás García Blanco, YPF’s executive director for upstream.

Asked if this heralded another 1bn barrel discovery, Mr García Blanco says: “Yes. But until the third well is drilled … I would like to be cautious. We hope to know by the end of the year or January 2012.”

The group, which is 57.43 per cent owned by Spain’s Repsol, announced in November that it had discovered 927m barrels of oil equivalent in a 428 sq km zone of the Vaca Muerta (“Dead Cow”) formation in south-western Argentina – more than six times higher than its initial estimate in May of 150m barrels. The discovery is three-quarters oil and one-quarter gas, it says.

That, Mr García Blanco notes, is based on “conservative” estimates that only 4 per cent of all the hydrocarbons will be extracted. Some in the US believe recovery rates of 8 per cent or even 15 per cent may be possible in time – something that will lead to eye-popping estimates of the potential for shale worldwide.

Argentina has some of the world’s biggest and best-quality reserves of shale hydrocarbons and is estimated to hold 774000bn cubic feet in recoverable shale gas.

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