UPDATE 1-Argentina says Chevron to invest $500 mln in Vaca Muerta shale area

(Adds details in paragraphs 2-3, background on previous announcement in paragraph 4)

June 9 (Reuters) - U.S.-based oil major Chevron will invest more than $500 million to develop the Trapial block in western Neuquen province, home to the massive Vaca Muerta shale basin, Argentina's economy ministry announced on Friday.

The announcement followed a meeting between Economy Minister Sergio Massa and company officials, according to a ministry statement.

The new spending plan is scheduled to start before July, it added.

Last year, Neuquen officials granted Chevron a concession for shale production in the area, with what the company said at the time would be a

pilot stage investment

of about $80 million.

Trapial is a 109-square-mile (283-square-kilometer) block.

The Vaca Muerta shale formation is the world's fourth-largest shale oil reserve and the second largest for shale gas. It represents a major source of both domestic energy and foreign exports for the South American country going forward.

Oil companies operating in the formation

have been ramping up output

from Vaca Muerta in recent months, which officials hope can eventually reverse the country's longstanding energy deficit. (Reporting by Carolina Pulice; Editing by David Alire Garcia)