Kuala Lumpur: YPF and Petronas, state-controlled companies from Argentina and Malaysia, signed a $550m accord to develop shale oil at the world’s fourth-largest deposit in Vaca Muerta, with a view to Petronas then pursuing some offshore exploration off Argentina later.

Miguel Galuccio and Shamsul Azhar Abbas, chief executive officers for YPF and Petronas, respectively, signed a deal to develop a 187 sq km area. YPF will invest $75m and Petronas $475m to drill more than 30 wells in three years in southwestern Argentina. Depending on the results the program could be expanded to a five-year $1 billion investment, YPF said.

YPF and Petronas may also develop offshore in the future as well as explore other fields in Latin America, the head of YPF said.