Argentina’s Vaca Muerta shale oil boom is losing steam as global crude prices fall and production costs rise, according to MSN. Despite hitting record output in August, drilling and fracking activity has slowed, threatening President Javier Milei’s ambitious goal to double oil and gas exports by 2030. Rising local costs, a strong peso, and policy uncertainty are deterring further investment. They write:
In Argentina, drilling and fracking activity in the Vaca Muerta, the world’s fourth-largest unconventional oil reserve, is already slowing down after months of brisk growth.
The slowdown comes as global oil prices decline and production costs soar, imperilling one of President Javiers Milleis’ top economic planks, transforming Argentina into an energy superpower.
Vaca Muerta, located in the western province of Neuquén, produces 64% of the country’s oil, although only 8% of its potentially productive area is in development. […]
The number of wells drilled in the Neuquén Basin fell to 55 in July from 67 in June, the third month running to see a decline, according to Argentine consulting firm AGKC. […]
In a September presentation, Argentina’s Secretary of Energy and Mining Coordination, Daniel González, stated that production costs in Vaca Muerta are currently 35% to 40% more than in the Permian Basin of the United States. […]
As production flattens and costs rise, the destiny of Vaca Muerta, and Argentina’s broader energy ambitions, may be determined by Milei’s ability to strike a balance between fiscal discipline and policies that keep the country’s shale boom alive.
Read more here.
