The Government of Argentina (GOA) sees the oil and gas sector as a major driver of exports and as a generator of foreign currency. The government is keen to attract foreign direct investment to spur economic growth.

Argentina possesses the world’s fourth-largest shale oil and second-largest shale gas reserves. The Vaca Muerta shale formation is located in the provinces of Neuquén, Mendoza, and Río Negro, and only a fraction has been developed for oil and gas production. Vaca Muerta’s shale quality, production incentives, tax exemptions, and negotiated labor concessions have contributed to lowering operational costs and increased efficiency. Many local firms are present in the market along with international exploration and production companies, including Aconcagua, Chevron, Pampa, Petronas, Pluspetrol, Raizen (Shell), Total, and Vista. Argentina’s leading energy company, YPF, holds the largest upstream sector market share. Industry reports a continued need for small- and medium-sized service companies with shale expertise to enter the market to further improve efficiency and lower costs.    

The province of Neuquén, home to the largest portion of the Vaca Muerta formation, continues to be a key driver of industry growth. As of September 2024, Argentina’s oil and gas production approached record highs, primarily due to increased output from the Vaca Muerta shale formation. In September 2024, Argentina’s crude oil production averaged 738,000 barrels per day (b/d), marking a 15 percent increase compared to September 2023 and representing the highest monthly production since 2003. The Vaca Muerta formation contributed significantly to this surge, accounting for 58 percent of the country’s total oil output in September 2024.

During the first nine months of 2024, Argentina’s natural gas production averaged 5 billion cubic feet per day (Bcf/d), reflecting a 5.2 percent increase over the same period in 2023. In August 2024, natural gas production peaked at 5.4 Bcf/d, the highest monthly output in 21 years.  The Vaca Muerta formation was a major contributor, accounting for over 70 percent of the country’s natural gas production, reaching 74 percent (3.8 Bcf/d) in September 2024.  Crude oil exports have risen significantly, increasing by an average of 33 percent per year from 30,000 b/d in 2017 to 128,000 b/d in 2023.  Shale oil constituted approximately 70 percent of these exports in 2023, with primary destinations including the United States, Brazil, and Chile.  Natural gas exports to neighboring countries such as Chile and Uruguay have also increased, facilitated by new infrastructure projects like the Perito Moreno pipeline which started operations in 2023.  These developments underscore Argentina’s growing prominence in the global energy market, driven by substantial investments in shale resource extraction and infrastructure expansion.

Resources

• Secretariat of Energy (Spanish)
• Argentine Institute of Petroleum & Gas - IAPG (Spanish)
• Argentina Oil & Gas Expo - AOG (Spanish)

For additional information, including market analysis, trade events, contacts, and the products and services that the U.S. Commercial Service can provide to help you succeed in the Argentine market, please contact Marcelo Amden, Industry Specialist