YPF signs with Chevron for shale fields YPF, the nationalised Argentine energy company, has reached a deal with Chevron of the US to develop shale oilfields in Argentina in a significant step forward for its plans to exploit the reserves discovered in the country in recent years. However, Repsol of Spain, which lost control of YPF in May when the Argentine government forcibly bought most of its stake, immediately announced it would take legal action against the agreement. YPF has agreed a memorandum of understanding with Chevron to work together to develop its vast Vaca Muerta shale reserves in western Argentina. It gave few details and no figures, underscoring a feeling in the industry that concrete partnerships will probably take a long time to establish. However, signing up a large US group as a partner, particularly after the acrimonious circumstances of the nationalisation, is a success for YPF. Chevron brings both financial strength and technical capability through its work on shales and similar "unconventional" reserves in the US. Miguel Galuccio, YPF's chief executive, said: "With partners of the weight and importance of Chevron, and finding paths to allow synergies between both companies, I am sure that this is just the first step in a relationship which will be long and important." Repsol controlled 57.43 per cent of YPF until April 16, when the government of Cristina Fernández announced it was seizing control of the company. It is fighting for some $10bn in compensation from Argentina and has written to other large international oil companies warning them that any investment in YPF or its assets will send lawsuits flying. It said: "Repsol will take legal action against this agreement. We do not plan to let third parties benefit from illegally confiscated assets. Our legal teams are already studying the agreement. Repsol was left with a 6.4 per cent stake in YPF when the company was formally expropriated in May, but has since built that up to 12 per cent, with one board seat, after the Spanish firm took back shares that had been pledged as collateral against loans by its former Argentine partner, Petersen Energía. A spokesman for Chevron had no immediate reaction to the threat of legal action, but the US company said in a statement that the scope of the MOU was "to explore and evaluate certain areas of mutual interest on conventional and non-conventional opportunities" and underscored its "ongoing, collaborative" two-decades-long relationship with YPF. Ali Moshiri, Chevron's president for Latin America and Africa, said the US company was "satisfied to be accompanying YPF on this process since the whole [energy] sector will benefit from its success." A YPF spokesman also declined to comment on the possible lawsuit. Mr Galuccio will fly to Los Angeles, London, Boston and New York in the next two weeks to drum up financial backers for his $37.2bn five-year investment plan, which is designed to boost the Argentine company's production by a third. Besides Chevron, YPF is also working on possible shale partnerships with Bridas, an Argentine energy company that is half-owned by Cnooc of China, and Gazprom of Russia. YPF said the MOU with Chevron established the US's company's interest in "evaluating the development of a shale cluster." The two companies also vowed to work together on improving recovery at maturing conventional fields. Argentina is believed to be home to the world's third-biggest reserves of shale hydrocarbons trapped deep underground in rock formations such as Vaca Muerta ("Dead Cow").