Investments in oil and gas production across Argentina’s basins will exceed $10.7 billion this year, up 18% from 2022, with special emphasis on Vaca Muerta in Neuquén basin, which alone accounts for nearly 70% of the total planned investments.
By the end of first-half 2023, overall oil production had risen by almost 12% compared with the same period last year, propelled by 37% growth in unconventional production. Natural gas production, on the other hand, increased by 2.7%, mainly driven by unconventional fields in Vaca Muerta, which showed a 10.3% year-on-year increase.
Concentrated investments in Neuquén basin are increasing national production, with daily oil production reaching 640,000 b/d, a 10% year-on-year increase, of which unconventional production accounts for 47%. The Neuquén basin alone contributes 63% to the country’s total crude oil production. When taken together, Neuquén basin and Golfo San Jorge basin—until a few years ago the country’s most productive—contribute 95% of Argentina’s oil production.
Outside of Neuquén and Northwest basins, Argentina’s other producing basins continue to experience year-on-year production declines, with the Cuyana basin being the most affected. And despite the overall production growth in recent years—particularly in 2023—Argentina’s oil production remains far from the peak reached in 1999.
There is confidence, however, that the peak can be surpassed in 2-3 years with various projects including the 110,000 b/d Transandean Oil Pipeline (OTASA), which has started pumping crude oil to Chile (currently 60,000 b/d), the Valle Oil Pipeline (OLDELVAL) capacity expansion connecting Vaca Muerta to the port of Coronel Rosales in Buenos Aires province, and YPF’s Vaca Muerta Sur Oil Pipeline future export project (340,000 b/d once finished).
According to a report by consulting firm Aleph, “the growth curve of unconventional resources in Argentina is striking,” with YPF holding the top three most productive blocks. Loma Campana (YPF) is the most significant unconventional field, contributing 25% of unconventional production, followed by La Amarga Chica (YPF) with 17%, and Bandurria Sur (YPF) with 11%. Bajada del Palo Oeste (Vista) maintains an 11% production share, and annual growth at Sierras Blancas (Shell) and Aguada del Chañar (YPF) is notable, although their production is still low compared with the top three fields.
Continuing the trend from 2022, Cerro Dragón (PAE) in Chubut province (Golfo San Jorge) remains the concession with the highest conventional oil production, accounting for 21%, while Manantiales Behr (YPF), also in the Golfo San Jorge basin, contributes 29% of the country’s conventional production.
