Argentina could be in Chesapeake sights

Looking south: Chesapeake CEO Doug Lawler holds talks with Argentina execs

Chesapeake Energy is casting an eye towards Argentina as one of potentially several countries targeted for possible international expansion for the US gas giant.

Chief executive Doug Lawler, speaking at an event in Houston on Thursday, said he recently met with senior executives and talked with "a few different companies" in Argentina.

He said Chesapeake has "not signed anything or committed to anything", stressing that any international moves by the shale-gas pioneer are "just on the horizon for us".

In recent months, Lawler has revealed the early stages of plans for Chesapeake to bring its knowledge of unconventional oil and gas development to shale basins outside US borders. He has made the rounds with a map of the world dotted with dozens of shale basins that Chesapeake has evaluated, from Europe and Africa to Asia and South America.

A movement overseas would mark a dramatic shift for the Oklahoma City-based company, the US' second biggest gas producer after ExxonMobil. Though former boss Aubrey McClendon had at one point toyed with the idea of expanding internationally, by 2011 he ruled out the possibility.

Lawler, who was in charge of international deep-water operations at Anadarko Petroleum before taking the helm at Chesapeake, has had his hands full in his first year on the job trying to get the company's finances in order.

But as he looks at emerging opportunities in shale plays around the world, he sees a need for Chesapeake's expertise. For countries looking to develop their unconventional resources, he said, "Chesapeake has to be in the discussion".

"We're not running out and spending money foolishly and imprudently in international areas, but we do believe that we have the expertise and the experience to participate in the desire and need for energy growth in the rest of the world," he said.

Argentina, home of the massive Vaca Muerta shale in the Neuquen basin, would make sense as a place to start.

"Some of the best world class shales exist in Argentina," Lawler said.

He noted that major companies like Chevron have already signed up for exploration concessions in the South American country. And while companies of Chevron's size are excellent operators and project managers, Lawler said, independent producers are likely better positioned to replicate the US' success in shale.

"It's the independents and the support from the service community that's driven the US energy industry and it will be those independents that will lead the rest of the world as well," Lawler said.

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