Amid Argentina's struggling economy, one sector is thriving: oil production, particularly from the Vaca Muerta formation.
Highest Production Levels in 20 Years
This unconventional oil reserve is pumping approximately 386,000 barrels daily, marking the highest production levels the country has seen in over 20 years.
According to Rystad Energy amd El Economista, if developments continue smoothly, Vaca Muerta could see a "second revolution," positioning it as a formidable competitor to U.S. shale giants like Eagle Ford.
Located in the Neuquén Basin of Patagonia, Vaca Muerta is estimated to contain 16 billion barrels of shale oil, making it Latin America’s largest unconventional oil reserve and one of the world’s most significant hydrocarbon deposits.
The Energy Information Administration noted similarities between Vaca Muerta and Eagle Ford, which produces around 1.2 million barrels daily.
Efforts Could Elevate Oil Exporter
Investment is surging in this fertile area. The Argentine government recently highlighted a year-on-year increase in hydrocarbon production, with June 2024 seeing a notable jump of 28.2% compared to the previous year.
YPF, the state-controlled oil company, is expanding its exploration efforts in Mendoza, targeting additional reserves in the Vaca Muerta formation. This new exploratory phase aims to drill deeper horizontal wells, potentially unlocking significant resources.
Private company Pampa Energía is also stepping up, announcing a $410 million bond issuance to expand operations in Vaca Muerta.
Together, these efforts could elevate Argentina to a net oil exporter, generating an estimated $20 billion in revenue by 2030, according to Rystad Energy.
Recent legislative changes under President Javier Milei aim to liberalize the oil market, removing price controls and encouraging private investment.
If these reforms succeed, Vaca Muerta could become a leading player in the global oil landscape, significantly impacting Argentina's economic recovery.
