BUENOS AIRES (Reuters) - Argentine energy company Bridas Holding will make a substantial investment in state-controlled YPF (YPFD.BA) in the days ahead, Bridas owner Carlos Bulgheroni told Reuters, marking a potential breakthrough in the government's search for partners.
Argentina's left-leaning government has been beating the bushes for investors in YPF since enraging European Union policymakers by seizing a majority stake in the company from Spanish oil major Repsol <(REP.MC) in May.
Citing a "confidentiality period", the South American oil mogul declined to disclose the investment planned, but said an announcement would come before the end of the month.
It will be "a substantial investment" in YPF's shale oil operations, Bulgheroni, who rarely talks to the media, said. Asked if it would be in the range of $500 million (310 million pounds), he said, "much more".
Argentina sits on huge resources of shale natural gas and oil, but large amounts of capital would be needed to bring them into production. The country remains virtually shut out of global credit markets a decade after staging the biggest sovereign debt default in history.
A Bridas deal would mark the first major investment in YPF since its nationalization. The company says it needs to invest $32.6 billion (20.2 billion pounds) through 2017, $4.5 billion (2.7 billion pounds) of which is to come from strategic partners, according to the government's plan.
"Once we have developed exploration we would proceed to a higher stage of development," Bulgheroni said.
"We're moving it quickly," he added, declining to specify the areas he plans to develop in partnership with YPF.
A U.S. Department of Energy report shows Argentina holds more natural gas trapped in shale rock than all of Europe - a 774-trillion-cubic-feet bounty that could transform the outlook for Western Hemisphere supply.
In 2010 YPF discovered the mammoth Vaca Muerta ("Dead Cow") formation in southern Argentina, which contains an estimated 23 billion barrels of oil equivalent.
"In terms of unconventional reservoirs, there is not only Vaca Muerta," Bulgheroni said. "There are many others."
Bridas Corp. - half owned by Bridas Holding and half by China's CNOOC (0883.HK) - holds 40 percent of Argentine company Pan American Energy. The remaining 60 percent is held by BP (BP.L).
Before nationalizing YPF, President Cristina Fernandez accused former parent Repsol of under-investing at a time of growing Argentine energy demand. Repsol denies the allegation and may object to a deal between YPF and Bridas.
The Spanish company filed a U.S. lawsuit this month to block a cooperation agreement between YPF and U.S. oil giant Chevron Corp (CVX.N), ramping up its legal response to the loss of its assets in Argentina.
"I think it's a very positive thing that different companies partner with YPF," Bulgheroni said. "Together we can advance the oil and gas industry in Argentina."
(Writing By Hugh Bronstein; Editing by Muralikumar Anantharaman)