Although the infrastructure needed to transport and transport oil is still scarce and oil exploration and research operations are in full swing, Vaca Muerta continues to break new records. This training of shale oil (shale oil) has become one of the hopes of the Argentine economy. To date, with a relatively modest investment, it produces significant quantities of crude oil and gas. Major projects (oil, gas and infrastructure) remain to come. Despite everything, the growing production of crude oil and gas from this field has already made it possible Argentina records its first energy surpluses in Argentina for a long time.
Little by little, the Neuquén region is developing and consolidating itself as the largest hydrocarbon-producing province in Argentina, thanks to the permanent growth of the Vaca Muerta deposits, the centerpiece of the oil capital generated in this province. So, in October, Crude oil production hits new all-time high at 447,460 barrels per daywhich represents an increase of 0.13% compared to the previous month and a notable increase of 26.35% compared to the same month of 2023.
This increase in production has even more value if we analyze the context in which the oil market finds itself, with extremely volatile prices that reach around 73 dollars per barrel, a relatively low level for the prices that have dominated the market since the end of the covid pandemic. . The lower crude oil prices, the less incentive there is to produce new oil. However, production costs at Vaca Muerta (the break-even point estimated at around $36 per barrel) are relatively low, allowing fracturing and producers in the region, like YPF or Pampa Energía, continue to work to produce more oil, even at current prices.
Thus, according to the latest data released this Thursday by the Ministry of Energy and Natural Resources of Neuquén, the increase in crude oil is largely due to the good performance of large areas such as Bajada del Palo Oeste, Coirón Amargo Suroeste, Lindero Atravesado, La Amarga Chica and Loma La Lata, which led to the increase in production in October. In cumulative terms, between January and October 2024, oil production was 24.15% higher than that recorded during the same period of 2023.
Geologists They estimate that this field could have crude oil reserves of 16 billion barrels. shale oil (shale oril), making it the largest unconventional crude oil reserve in Latin America and one of the largest unconventional hydrocarbon reserves in the world. Vaca Muerta is often compared to the prolific Eagle Ford shale field in Texas, a field that pumps approximately 1.2 million barrels of oil. The United States Energy Information Administration (EIA) confirmed in 2019 that Vaca Muerta and Eagle Ford share similar depths, thicknesses, pressures and mineral compositions.
It should be remembered that the crude oil extracted in Vaca Muerta is shale oil, so it is necessary to resort to hydraulic fracturing or hydraulic fracturing for its extraction. This is an extraction technique known since the 1950s and practiced around the world for several decades, but which was only fully exploited a little over a decade ago, the Permian Basin of United States being a big representative. The U.S. Permian Basin already produces more than 6 million barrels of crude oil each. Fracturing involves injecting a fluid composed of 95% water; 4.5% sand and 0.5% additives to create the necessary pathways through which hydrocarbons flow naturally. This operation is done in stages and over 1 to 2 days only. Once completed, the well will remain in production for the next 20 to 40 years, assures YPF. Vaca Muerta is the richest shale oil deposit in South America.
All this has led to industrial investments being concentrated on this “land”. The Argentine government explained in a note published in September that production of unconventional hydrocarbons in Argentina continues to show sustained growth. For example, the Argentine state-controlled oil company YPF received authorization to carry out a new exploration campaign in an area north of the enormous Vaca Muerta unconventional hydrocarbon formation and under the jurisdiction from the Argentine province of Mendoza (west), as revealed by official sources. As the Government of Mendoza indicated in a statement, the Provincial Executive authorized YPF to begin the second exploratory period in the CN VII A zone.
Argentina’s great hope
From YPF itself they explain that The country’s crude oil production could double (Argentina currently produces just over 700,000 barrels of crude oil per day) in the coming years to exceed 1 million barrels per day, which would generate exports of 18 billion dollars per year in 2026. with a surplus in the energy balance of approximately 12.5 billion dollars. This would mean the entry of a “flow” of dollars that would allow Argentina to face with greater security the end of the exchange rate and the payment of the country’s external debt. Even these estimates may be insufficient. There are calculations that guarantee that Argentina could reach an energy surplus of $30 billion in 2030, according to a report published last week by PwC.
According to the consultancy’s projections, Argentina would reach production of one million barrels of oil and more than 250 million cubic meters of gas per day by 2030.”Vaca Muerta has the geological capacity to bring the country to never before seen levels of production. In this new scenario, the interest of local and international companies to invest in unconventional oil and gas is very significant given the strong potential of Vaca Muerta”, Ezequiel Mirazón, partner at PwC Argentina and expert in energy and mining.
Although this miracle of Vaca Muerta is not directly linked to the government of Javier Milei (it is indirectly because Milei facilitates investment and provides legal certainty), it could become an important step in helping Argentina avoid a default and to recover from the economic crisis in which the country has been plunged since last year.
“In terms of gas, Argentina could be self-sufficient and constitute a strategic resource in the context of energy transitions to contribute to the decarbonization of global economies. Our country could quickly become a serious exporter of gas to the region, particularly to Chile and Brazil. and in a later stage, an exporter to the world with an LNG plant,” assures YPF.
