From January 2021 to September 2024, Argentina experienced significant growth in its energy sector, with crude oil production increasing by 50% and natural gas output rising by 27%. These gains have brought production levels close to records set in the early 2000s, according to the country’s energy ministry, the Secretaría de Energía de la República Argentina (SESCO).
The Vaca Muerta shale formation, primarily located in Neuquén province, is a key driver of this growth. It holds an estimated 308 trillion cubic feet of recoverable shale gas and 16 billion barrels of shale oil and condensate, making Argentina one of the top five nations globally in shale oil and gas resources. Crude oil production in Vaca Muerta surged beginning in 2021, driven by increased drilling, technological advances, favorable oil prices, infrastructure improvements, and supportive policies.
By September 2024, Argentina’s crude oil production averaged 738,000 barrels per day (b/d), a 15% increase from September 2023 and the highest monthly output since 2003. Of this, 58% was produced in the Vaca Muerta formation, according to SESCO.
Natural gas production also saw a boost in 2024, averaging 5.0 billion cubic feet per day (Bcf/d) in the first nine months, a 5.2% increase compared to the same period in 2023. In August 2024, the country hit its highest natural gas output in 21 years, reaching 5.4 Bcf/d. The Vaca Muerta formation accounted for over 70% of Argentina’s natural gas output, peaking at 74% (3.8 Bcf/d) in September.
The increase in production has also strengthened Argentina’s export potential. Crude oil exports grew by an average of 33% annually from 2017 to 2023, with shale oil making up around 70% of these exports. The United States, Brazil, and Chile are the top destinations for Argentina’s crude oil. The completion of the Vaca Muerta Norte Oil Pipeline has further facilitated exports, especially to Chile.
On the natural gas front, Argentina’s growing production has reduced its reliance on liquefied natural gas (LNG) imports. During the first nine months of 2024, LNG imports fell by 43% compared to the same period in 2023. Pipeline imports from Bolivia, which had accounted for half of Argentina’s natural gas imports, ended in September 2024. As a result, Argentina is shifting to export natural gas, particularly to neighboring Chile and Uruguay.
Several infrastructure projects are supporting this transition, including the Perito Francisco Pascasio Moreno gas pipeline, which began operations in 2023. This pipeline, which transports natural gas from Vaca Muerta to the provinces of Santa Fe and Buenos Aires, has increased exports to Chile by 14% in 2024. In addition, the Gasoducto Norte pipeline is being reversed to transport gas to northern Argentina, with the first phase of operations starting in November 2024. This project is expected to be fully operational by the first quarter of 2025 and will support gas exports to Chile and Brazil.
Argentina’s government has introduced policies to encourage energy production and exports, such as the Plan Gas program and the Plan Gas IV Program, which allows for multiyear natural gas export contracts. Additionally, the government passed the Promotional Regime for Large Investment (RIGI), offering incentives to attract investment in infrastructure projects.
Looking ahead, several companies are planning floating LNG (FLNG) infrastructure projects. Golar LNG has a 20-year agreement with Pan American Energy to deploy an FLNG vessel in Argentina by 2027, with a targeted production capacity of 2.45 million metric tons per year. Tecpetrol SA is designing an onshore plant with an initial capacity of 4 million metric tons per year. Argentina’s state-controlled YPF SA also plans to bring an FLNG facility online by 2027, aiming to increase export capacity by 1 to 2 million metric tons per year.
These developments position Argentina as a growing player in the global energy market, both in terms of production and exports.
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