Argentina: Oil and Gas Landscape
Argentina possesses the worldās fourth-largest shale oil and second-largest shale gas reserves. The Vaca Muerta shale formation is located in the provinces of NeuquĆ©n, Mendoza, and RĆo Negro, and only a fraction has been developed for oil and gas production. Vaca Muertaās shale quality, production incentives, and tax exemptions have contributed to lowering operational costs and increasing efficiencies. Industry players report a need for small- and medium-sized service companies with shale expertise to enter the market to further improve efficiency and lower costs.
Argentinaās energy regulatory framework seeks to provide greater market certainty to boost oil and gas production as the government sees the energy sector as a major driver of economic growth. That said, investments have slowed as a result of the pandemic as well as policy uncertainties that include foreign exchange controls that hinder repatriation of dividends. However, the interest in developing the sector remains.
The Government of Argentinaās āPlanāÆGasArā aims to increase local natural gas production to fuel the worldās energy transition by providing a framework that ensures access to foreign exchange and government support for increased production. Moreover, Argentinaās National Congress is currently reviewing a hydrocarbons bill based on a hydrocarbon investment promotion regime that intends to provide the industry with long-term tax and fiscal stability at the provincial and municipal levels. The bill is expected to stimulate incremental oil and gas production for domestic and international markets, promote production continuity of mature wells through secondary and tertiary recovery (which represent about 80 percent of the countryās conventional hydrocarbons production), and secure access to foreign exchange.
Major global exploration and production companies including Chevron, ExxonMobil, Petronas, Raizen (Shell), and Total are present along with many local firms, including Argentinaās majority state-owned energy company, YPF, which holds the largest upstream sector market share. U.S. companies can look for opportunities to enter supply chains or provide niche service expertise, especially for products, services, and technologies to combat climate change.
For additional information, including market analysis, trade events, and U.S. Commercial Service offerings, please contact Senior Commercial Specialist Marcelo Amden (marcelo.amden@trade.gov).