Russian President Vladimir Putin, left, shakes hands with Argentina’s President Cristina Fernandez.

Russia is making a move on Argentina’s shale gas. Russia’s state owned giant Gazprom has signed a memorandum of cooperation with YPF from Argentina during a ceremony which took place on 23th April in Moscow, Russia. The president of Argentina Cristina Fernandez de Kirchner was present at the ceremony as well as Vladimir Putin, the president of Russia. This memorandum of cooperation has just deepened the agreement of the two countries which has been made last year when Putin visited Argentina.

The agreement calls both sides for development and exploration of shale gas which is located in the Neuquén province of Argentina. The province is located in west central Argentina and is home to many “Vaca Muerta” (a geologic formation), this formations can be huge and is the main reason why Argentina is in second place for shale gas reserves, behind China who is the world leader. Analysts estimate that Argentina has over 800 trillion of cubic feet recoverable shale gas. There are many other Oil companies that have an interest in this area and some have even made their presence over there, including Chevron and ExxonMobil. Both Russia and Argentina see potential for political alliance of mutual benefit. The government of Argentina has supported Russia’s annexation of the Crimean peninsula while Russia has backed Argentina’s complaints over the Falkland Islands which are controlled by the United Kingdom. It is led to believe that the Falkland Islands hold large gas and oil reserves which are located on its coast; however there are only a few British companies who are exploiting them. The relations between Russia and Western Europe have been damaged severely over the current war in Ukraine, and this has caused Russia to seek allies and business partners elsewhere.

The agreement signed between YPF and Gazprom was hailed by Fernandez and Putin both, and Putin stated that this will lead the two countries in to a “comprehensive and strategic partnership.” Both of the sides have stated that it would be better that they use their own currencies while doing business, as opposed to using the United States dollar. Both of the countries have a standoff with the United States of America. Argentina lacks both expertise and resources in order to exploit the Vaca Muerta on its own and this is where they hope Russia will fill the gap.