Reuters International

Chile's President Michelle Bachelet waves before the annual State of the Nation address at the national congress building in Valparaiso city, Chile, May 21, 2016. REUTERS/Rodrigo Garrido

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By Anthony Esposito and Antonio De la Jara

FRUTILLAR, Chile (Reuters) - Argentine President Mauricio Macri and Peruvian President-elect Pedro Pablo Kuczynski urged their South American counterparts at the Pacific Alliance trade bloc summit on Thursday to deepen energy ties across the region.

"Considering the new discoveries we've made in non-traditional energy, as I've discussed with Chile's President (Michelle) Bachelet, I believe the only path forward is to think about a unified energy matrix for Argentina and Chile," Macri told a packed theatre in picturesque Frutillar.

"And let's hope to integrate Bolivia, Brazil, Uruguay and Paraguay," he said.

Despite being home to one of the world's biggest shale oil formations, Argentina has for years been a net energy importer as the vast Vaca Muerta formation has remained mostly untapped.

Royal Dutch Shell's head of unconventional business said earlier this month that the company hoped to launch an early production well this year at Vaca Muerta, considered the world's No.2 shale resource after North America.

"Our energy system, for example, has a surplus and we're looking for markets for our electricity, including northern Chile which has an (energy) deficit," said Kuczynski, a 77-year-old former investment banker who won the Andean country's tight runoff race earlier this month.

Macri also argued for greater integration between Latin America's two largest trade blocs.

The Pacific Alliance trade bloc, which includes member nations Chile, Colombia, Mexico and Peru, has moved to reduce trade tariffs between members since forming the bloc in 2011.

Argentina, a member of Mercosur, Latin America's other trade bloc, is looking to bring itself closer to the Pacific Alliance.

"We have to boost integration. We want a Mercosur for the twenty-first century, which has a view towards integrating with the Pacific Alliance. I believe that path is absolutely better for everyone," Macri said.

(Reporting by Anthony Esposito & Antonio de la Jara; Editing by Bill Trott)

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