Argentina's state-run energy company YPF said on Dec. 15 it has entered a $500 million joint venture with Dow Chemical to drill for natural gas next year in the Vaca Muerta shale formation in Patagonia.

A spokesman for the company said the investment will be split evenly between Dow and YPF during 2016. Production will come from Vaca Muerta's El Orejano field.

"By the end of 2016, production at El Orejano could triple to reach an average 2 million cubic meters per day," a YPF statement said, adding that the investment comes atop an earlier $350 million joint venture between the two companies.

YPF estimates the Vaca Muerta deposit contains 661 billion barrels of oil and 1,181 trillion cubic feet of natural gas, making it one of the biggest shale reserves in the western hemisphere.