Argentina's state-run oil company, YPF and Dow Chemical's local unit Dow Argentina have announced plans to invest $500m in 2016 to increase shale gas production on the El Orejano block.
The 41km² block is part of the Vaca Muerta shale gas deposit in the country's Neuquén province.
YPF and Dow have already invested $350m in a joint shale gas venture in 2013.
The Wall Street Journal reported the companies saying in a statement that the total investment may reach $2.5bn going forward.
"The companies further could increase that to over 180 wells in the coming years."
The joint venture (JV) shale gas project in Argentina is expected to have about 750,000m³ of production capacity a day and may triple to about two million in 2016.
So far, YPF and Dow have drilled 19 shale gas wells in Vaca Muerta and plan to drill 30 new wells in 2016.
The companies further could increase that to over 180 wells in the coming years.
The collaboration between these two companies began in September 2013, when they signed a final agreement to jointly develop shale gas at the Vaca Muerta formation with an investment of $188m.
YPF and Chevron which are also working to produce shale gas deposit, invested around $3.5bn to drill unconventional oil wells in Argentina.
The company also collaborated with Malaysia-based Petroliam Nasional (Petronas) to invest up to $9bn in investment over the next ten years.