Tsvetana Paraskova
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
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By Tsvetana Paraskova – Nov 23, 2024, 6:00 PM CST
- Interest in Argentina’s top shale play, Vaca Muerta, has increased since Milei took office a year ago.
- Reuters: Argentina will need about $58 billion worth of new or upgraded pipelines, processing plants, and export terminals to ship the rising oil and natural gas production in Vaca Muerta.
- Argentina’s market deregulation efforts are expected to raise the energy investments in the country by about $2.5 billion to $15 billion next year, officials have said.
Booming oil and natural gas production from Argentina’s Vaca Muerta shale play hasn’t translated into an export boom amid a lack of infrastructure and still early days in the new fiscal regime to facilitate private investment in the Argentinian energy sector.
The government of libertarian and business-friendly president Javier Milei has enacted market and fiscal reforms aiming to attract private investment into energy projects and infrastructure to boost the domestic supply of oil and gas and lay the foundations for exports.
Interest in Argentina’s top shale play, Vaca Muerta, has increased since Milei took office a year ago. But the new government has also announced an end to state financing for pipelines and other infrastructure projects. So companies have to rely on private investment and the new tax breaks and other incentives in the new free-market approach to the economy. They would also want to see capital and foreign currency controls lifted in the country before committing billions of U.S. dollars to developing export routes out of Vaca Muerta, analysts say.
Argentina will need about $58 billion worth of new or upgraded pipelines, processing plants, and export terminals to ship the rising oil and natural gas production in Vaca Muerta, according to estimates by Reuters.
Vaca Muerta—Spanish for ‘dead cow’—has been dubbed the Argentinian Permian, although its geologic properties have been compared more appropriately to the Eagle Ford.
The shale play in the Neuquen province is estimated to hold recoverable resources consisting of 16 billion barrels of oil and 308 trillion cubic feet of natural gas. Those numbers make the Vaca Muerta the world’s second-largest shale gas deposit and the fourth-biggest shale oil resource.
Related: U.S. Drilling Activity Slips Further As Market Volatility Remains
With Milei’s market reforms to encourage large-scale and foreign investments into the energy sector, Argentina hopes that future oil and gas exports will bring billions of U.S. dollars to Argentina’s depleted foreign currency reserves.
The so-called Large Investment Incentive Regime – or RIGI, by its Spanish initials – is offering tax breaks and other incentives for major investors in the South American country.
Argentina’s market deregulation efforts are expected to raise the energy investments in the country by about $2.5 billion to $15 billion next year,