From being practically “dead” to producing oil in large and increasing quantities. This is the very short-term story of the Vaca Muerta field, the field containing the most unconventional crude oil (shale oil) the largest in all of South America. This deposit could make Argentina a new non-OPEC oil supply engine at the end of this decade, according to experts at Energy intelligence (EI), an energy data center based in New York. This shale deposit hides great potential, these experts believe. With reserves estimated at 16 billion barrels of oil and 307 trillion cubic feet of gas, Argentina could soon overtake Venezuela as a crude oil producer. Furthermore, “with the new pro-business, free-market President Javier Milei coming to power and a series of companies eager to exploit the country’s shale resources, Argentina is poised to become a bigger player in the global oil and gas sector,” they say.
The Neuquén de Vaca Muerta basin continues to leave experts and analysts speechless. The strong growth in production from this field is boosting oil production in Argentina, which has allowed the country’s crude oil exports to double in a short time. reaching record numbers not seen since 2004. According to data from the consulting firm Economía & Energía, the average daily production of Argentina touched 695,000 barrels in the first eight months of 2024, representing an increase of 40% compared to 2017.as production reached its lowest point in three decades. This growth is reflected in a substantial increase in exports, which reached an average of 177,000 barrels per day, a volume that had not been reached for twenty years.
Who is responsible for this growth? The direct and short answer is Vaca Muerta.. This field produces around 400,000 barrels per day compared to 100,000 b/d in 2018, accounting for the majority of Argentina’s 740,000 b/d total production in August, also a 20-year high. But not only that, industrial sources suggest that production from this field will continue to increase significantly in the years to come. “The equilibrium costs (break-even point) They fell by about $40 a barrel, compared with more than $50 in the United States, according to consultancy Rystad Energy. Furthermore, new intermediate infrastructures (pipelines, extraction pumps, horizontal drilling, etc.) have made it possible to increase the flow of new volumes of oil and gas.
Argentina has more than tripled its crude oil exports since 2013 until reaching an average of up to 177,000 barrels per day recorded in the latest data. Julián Escuder, director in Argentina of the independent company Pluspetrol, assured IE that he sees “a lot of appetite” in the market for Medanito – the light, sweet crude oil from Vaca Muerta – and expects an “exponential growth” in demand in the future. With the boom of Vaca Muerta comes that of the Argentine oil sector. Aleph Energy estimates that the country’s crude oil production (counting Vaca Muerta and conventional production) could exceed 900,000 barrels of crude oil per day at some point in 2025. This is a significant milestone for the Argentina, which, for the first time in history, will be able to produce more oil than Venezuela if these predictions come true and if the Caribbean country remains immersed in its particular cross path.
The International Energy Agency (IEA) went further and assured this week that Argentina’s supply (oil and derivatives) had increased by 40,000 barrels in August to reach 840,000 barrels per day, which which represents an upward revision of 30,000 barrels from last month’s report. These increases are explained by higher growth than expected. in the Loma Campana and Bandurria Sur blocksdevelopment zones neighboring the black oil window (very small quantities of associated gas) of the Neuquén basin. By the end of the year, production is expected to increase by another 20,000 barrels per day to 820,000 barrels per day, about 60,000 barrels more than the previous year. “In 2025, in addition, growth will accelerate by an additional 70,000 barrels per day, bringing Argentina’s production to 890,000 barrels per day,” says the latest IEA report.
From Bloomberg explain that the Otasa pipeline, which transports oil from Vaca Muerta in Chile, will reach its maximum capacity of 110,000 barrels per day next year, while the Oldelval expansion (Vaca Muerta – Bahía Blanca) will allow the export of 310,000 barrels per day. By 2030, exports of crude oil could reach 900,000 barrels per day. Without a doubt, this level of oil sales will provide an “additional” boost to the Argentine economy. In middle- and lower-income countries, oil sales can generate very significant increases in public and private income. The barrel has an almost fixed international price regardless of the income level of the country that produces it.
This intense growth of Vaca Muerta and Argentine oil in general This will be possible with the construction of the so-called Vaca Muerta Surthe pipeline that will connect unconventional wells to the Gulf of San Matías, Río Negro and which plans to transport around 700,000 barrels per day by the end of the decade. In the last quarter of 2026, it would already be able to transport 180,000 thousand barrels. These are investments which, barring catastrophe, will almost certainly be made, which resemble a “milkmaid story”. The legislative changes adopted by the government of Javier Milei appear to attract national and international investments.
End of bottlenecks
YPF assures that in 2026 the oil bottleneck in Vaca Muerta will end. With this new infrastructure, the potential of Vaca Muerta will increase. It is for this reason that the oil company YPF received authorization to carry out a new exploration campaign in an area located north of the enormous unconventional hydrocarbon formation of Vaca Muerta and under the jurisdiction of the province Argentina from Mendoza (west), according to revealed 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.
After announcing the positive results of its explorations in Paso Bardas Norte and CN-VII, in which it invested 17 million dollars, the oil company asked Mendoza for authorization to carry out a second period of exploration in the area reserve CN-VII of Argentina. The largest hydrocarbon producer plans to drill two deeper horizontal wells in this area. Vaca Muerta is the world’s second largest unconventional gas reserve and the fourth largest such oil reserve. With 30,000 square kilometers, the formation has its epicenter in the province of Neuquén (southwest), but extends to other provinces, such as Mendoza.
“Mendoza owns 30% of the Vaca Muerta formation in its basement. We must advance in the exploration of these resources to be able to certify them, because they constitute great potential for the production of hydrocarbons in Mendoza”, highlighted a few days ago the provincial Minister of Energy and Mines, Jimena Latorre. “YPF’s progress engages more investment “This is an excellent sign on this path, which also encourages other companies to explore our resources,” the minister added. The new exploration period, which will take place over four years, will be crucial to more precisely assess the resources. subsoil characteristics and determine the potential for unconventional hydrocarbon production in the region.
Not only YPF, The company Pampa Energía also announced a debt issue of 410 million euros a few weeks ago. dollars as part of a key move to expand its operations in Vaca Muerta. Pampa is the third gas producer in the Neuquén basin. From Reuters they point out that Argentina hopes that this increased investment in Vaca Muerta can increase national production, boost exports and help maintain the energy surplus obtained last month.
However, Vaca Muerta is expected to experience an oil and gas revolution. Exports will allow the energy and current balance to be more positive each year for Argentina, due to a considerable increase in gas and oil exports and a decrease in imports of these hydrocarbons. The country has stopped importing gas from Bolivia and LNG purchases will be sharply reduced in 2025. By 2030, and already considering LNG production, Argentine exports could reach $30 billion per year.
