ExxonMobil Corp. said Tuesday it would proceed with a long-term oil development in Argentina’s Bajo del Choique-La Invernada block in the prospective Vaca Muerta formation on encouraging results from a pilot project.

The project is expected to produce up to 55,000 boe/d within five years and include 90 wells, a central production facility and export infrastructure connected to the Oldeval pipeline and refineries.

“We are encouraged by the excellent results of our Neuquén pilot project and look forward to increased production through this significant expansion,” said Senior Vice President Staale Gjervik, who oversees the unconventional business.

“The reforms implemented by the federal and provincial governments have been critically important to enabling the development of the Vaca Muerta Basin as one of the country’s main energy resources.”

If the expansion is successful, ExxonMobil could invest in a second phase, which would produce up to 75,000 boe/d. Timing of the second phase would depend on initial project performance and business and market conditions, among other factors.

“ExxonMobil has been an active player in the Neuquén basin since 2010 and in Argentina for more than 100 years,” said ExxonMobil’s lead country manager Daniel De Nigris. “We will continue to work closely with the government and our partners and will use our expertise and capabilities to bring jobs and other benefits to local communities.”

In 2015, the Neuquén provincial government granted ExxonMobil a 35-year concession in Vaca Muerta for the Bajo del Choique-La Invernada block.

ExxonMobil began an exploration pilot program in 2011 and now has three producing wells, and three additional wells moving into production. A production facility, gas pipeline and oil terminal have been in operation since 2017 and were recently connected to the Pacific Gas pipeline by a 16-inch diameter pipeline.

Bajo del Choique-La Invernada is a 99,000-acre block about 58 miles northwest of Añelo and 114 miles northwest of Neuquén city. ExxonMobil Exploration Argentina is operator and holds 90% interest in a 10% partnership with Gas y Petróleo del Neuquén.

ExxonMobil Exploration Argentina is leading its unconventional operations in the Neuquén basin under a joint venture agreement with Qatar Petroleum, which has 30% in ExxonMobil upstream affiliates in Argentina.

Argentina already is exporting gas from the Vaca Muerta to various points in Chile for residential, electric power and industrial uses. Production last October reached 4.66 Bcf/d, up 7% year/year. Production of unconventional gas alone was up by 243% to hit 883 MMcf/d, according to Argentina’s energy secretariat.

Many of the largest operators in the world are working in Argentina, with most of the focus today in the Vaca Muerta. Chevron Corp. earlier this year launched a pilot program on 162,000 net acres in the northern part of the formation. It is joined by operators that include BP plc, Royal Dutch Shell plc, Equinor ASA and Petroliam Nasional Berhad.