After a decade of falling oil production, Argentina is rebounding hand in hand with the consolidation of the Vaca Muerta formation. A report by an international consulting firm says that this Neuquén field could go from 300,000 barrels of oil per day this year to more than one million by the second half of 2030.
The increase would mean tripling the production of Vaca Muerta, and almost doubling that of the entire country. According to the projection, Vaca Muerta could generate $20 billion from oil exports. "Exports can be to South American countries such as Brazil, Chile and Peru, but also to the United States and Europe," says Rystad Energy, a consultancy specializing in energy.
Although there has been talk of US $ 20,000 million dollars of energy exports in 2030, there is contemplated that this will also be with gas and other energy products. In this case, Rystad understands that goal can be achieved with oil alone. With the addition of gas, the energy export boom could be even greater.
Of course, everything will depend on the macroeconomic context. Regulations, the standardization of the foreign exchange market, and the movement capacity of producers and their suppliers play a key role. "Growth will occur if companies have the capacity to move oil and the availability of drilling equipment does not limit growth," they say.
The forecast shows that Vaca Muerta still has a lot to grow, and is on track to become one of the main sources of unconventional energy, in the style of Eagle Ford and Bakken, two formations of the United States. Eagle Ford and Bakken took the United States out of any energy dependence on oil, and made it a net exporter of that commodity.
"Capacity constraints to transport persist, and the availability of drilling rigs remains an ongoing concern," Rystad Energy said. "The learning curve for operators in the basin has been steep, and they will need to continue this trend to maximize their production potential. If all industry participants work together to address these constraints before they become critical, production could exceed 1 million barrels per day sooner rather than later.
Passing the threshold
Vaca Muerta is the key to Argentina's energy development." If they reach one million barrels per day, it would be a 'threshold' (as an achievement) that would change the perception about the country, in addition to reducing dependence on imports and turning Argentina into a key regional player in the global oil market," says Alexandre Ramos Peon, Head of shale research at Rystad Energy.
During 2022, Argentina imported almost US$ 5,000 million more than it estimated in energy. It was because of the Russian invasion of Ukraine, which skyrocketed international prices. The flip side of this was that the outflow of dollars convinced the government to move forward with the construction of the gas pipeline that goes from Vaca Muerta to Buenos Aires. More than $1 billion could be saved this year by that work, and that number may continue to grow as there are expansions.
"In February 2023, Vaca Muerta produced 291,000 barrels. Which means an increase of 76,000 barrels. Gas production also increased by 15%. The growth is remarkable, but not extraordinary, considering that this is a relatively new development," says Rystad.
The consultant formulates a series of technical considerations for operators, which it sees achievable. Of course, it warns that the forecast may be altered by "significant macroeconomic changes or political instability in Argentina towards 2030".
Oilmen often say that "the rock" (the one that gives rise to unconventional oil and gas) is one of the best in the world. Rystad validates that assessment with graphs and analysis. "Oil yield is proving superior to similar horizontal wells in the largest U.S. unconventional oil formations."