Argentina’s unconventional oil and gas sector is maturing, driven by Vaca Muerta Shale developments. Production is rising significantly, with December 2024 output reaching 447,000 barrels per day—a 26% increase from the previous year. Upcoming reforms aim to improve investment perceptions amidst historical challenges. Production could potentially reach 1 million b/d by 2030, alongside a noted rise in gas production.
Argentina’s unconventional oil and gas sector has entered a phase of maturation, marked by significant production growth, increasing asset valuations, and heightened merger and acquisition activity. This transformation is largely propelled by developments in the Vaca Muerta Shale, illustrating a similar trajectory as the U.S. shale boom of the late 2000s and early 2010s, moving from initial project phases to a key contributor to regional supply expansion.
In an effort to improve its investment climate, Argentina is implementing government reforms as the shale sector reaches important milestones in upstream, midstream, and corporate investment. Nevertheless, the country lacks some of the advantages that boosted the U.S. shale industry, such as private land ownership rights and a well-established oil-field services sector.
Macroeconomic challenges and perceived risks — especially following the 2012 renationalization of the majority of YPF — have discouraged many energy companies from investing. Despite these obstacles, companies like YPF alongside major firms and a determined group of independents have continued their operations in Vaca Muerta, achieving a record production of 447,000 barrels per day in December 2024, a 26% increase from the previous year.
Forecasts indicate that production will escalate to 1 million barrels per day by the decade’s end. Additionally, unconventional gas production has shown an uptrend, reaching 76.2 million cubic meters per day in December, reflecting a growth of over 13% compared to the prior year.
In conclusion, Argentina’s unconventional oil and gas sector is transitioning into a more mature phase characterized by significant production increases and rising asset valuations. The government’s reform efforts aim to attract further investments despite facing inherent disadvantages and past challenges. With substantial production targets projected for the near future, the Vaca Muerta Shale stands as a critical component of Argentina’s energy landscape.
Original Source: www.energyintel.com
