Argentina's Vaca Muerta poised to double oil output under Milei
A new pro-business government and concerns about oil supply from the Middle East have led to increased drilling and a rapid increase in hydrocarbon extraction from the Vaca Muerta shale formation in northern Patagonia, Argentina, Reuters reported on Wednesday.
Reuters highlights that this rapid drilling is accompanied by the construction of gas pipelines, through which the fuel will flow to the country's capital, Buenos Aires, and beyond when LNG production facilities begin operations.
Under the leadership of libertarian president Javier Milei, the government is promoting oil and gas exports, striving to secure foreign currency and lift the country out of a deep financial crisis. They have also announced a series of incentives aimed at attracting significant investments, particularly in the energy sector.
The "Dead Cow" is poised to deliver 2 million barrels of oil per day
Vaca Muerta, which translates to "Dead Cow" in Spanish, is a geological formation covering an area comparable to the size of Belgium. It boasts the second-largest shale gas reserves and the fourth-largest shale oil reserves in the world. However, much progress remains to fully harness this potential.
Reuters reports that the town of Anelo, which a few decades ago comprised only a handful of houses, now has hotels, restaurants, and even a casino to accommodate the influx of workers in the extraction sector.
"The boom is already here. There used to be nothing here, absolutely nothing," said a 70-year-old resident of the town, Monica Paredes.
"The growth is so staggering that the infrastructure can't keep up with the rising population," emphasized former Argentinian secretary of hydrocarbon resources, Jose Luis Sureda.
Authorities estimate that Vaca Muerta could supply 2 million barrels of oil per day, nearly five times the current shale oil production in Argentina. Increasingly, people believe that thanks to Vaca Muerta's potential, the country could become a significant player in the global fuel market.
However, experts point out that to achieve this, multi-billion dollar investments in infrastructure, including gas export terminals, equipment, and a skilled workforce, are necessary.
