FERTILISERS major Indian Farmers Fertilizer Cooperative (Iffco) has invited state-run explorer Oil India (OIL)

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and gas distributor Gail (India) to participate in a prolific oil and gas project in Argentina.

Iffco's offer came on the back of huge shale gas discovery it made in Neuquen basin in Latin America. The 100 trillion cubic feet (tcf) discovery was done in collaboration with Canada's Americas Petrogas Inc.

The world's largest manufacturer of processed fertilisers has asked OIL and Gail to join hands on revenue and product-sharing model, the cooperative's managing director US Awasthi said in the capital on Monday.

OIL and Gail officials will visit the site soon and carry out due-diligence survey. They will get back to us by mid-March, added Rakesh Kapur, joint managing director at Iffco. The company may also invite ONGC and Reliance Industries (RIL) to join hands for exploration.

Other than Indian companies, Iffco and API are also talking to international energy majors such as ExxonMobil, Total and Repsol for partnership to develop energy assets in Neuquen.

Last year, Iffco entered into an alliance with API by acquiring about 15 per cent equity in the Canada-based explorer. API is the operator of 16 oil and gas blocks in Argentina's Neuquen Basin.

Out of these, nine blocks in western part of the basin are rich in shale gas. The operator has completed seismic data acquisition and will start exploratory drill this week, said Barclay Hambrook, president and CEO of API. The drilling exercise for exploring shale gas will cost the companies nearly $ 500 million in next three-five years.

Hambrook said gas flow will start in four-five years. There is an estimated reserve of 5-10 tcf of oil trapped within the shales.

Other seven blocks have huge reserves of crude oil. Currently, 1,000 barrels of oil per day (bopd) are pumped out from these two blocks. Rest five blocks is in the various stages of exploration. A peak output of 5,000-8,000 bopd is anticipated in the next three years, Hambrook added. The operator is planning to spend around $ 60 million in the calendar year 2011 for drilling additional wells in these fields.

According to international body Society of Petroleum Engineers (SPE) Latin America has an estimated shale gas reserve of 2,116 tcf. At present, shale gas is produced only in North America.

A gas discovery in Argentina will provide an opportunity to IFFCO for setting up gas-based ammonia-urea fertilizer plant in the country.