10/07/2026 18:04 - Economia
The Argentine oil industry is undergoing a profound transformation, marked by a record-breaking investment almost entirely flowing into unconventional formations.
To understand Argentina's current energy landscape, one must look at Vaca Muerta. Located in the Neuquén Basin (northern Patagonia), it is a geological formation of extraordinary richness. The shale oil extracted here (petroleum trapped in rock layers that requires hydraulic fracturing) is breaking historical records. Meanwhile, traditional or conventional fields (where oil flows naturally or with simple pumping) are experiencing a natural decline, accelerated by a massive migration of capital toward large-scale, highly profitable projects.
According to data from May 2026, shale oil production in the Neuquén Basin reached a historic peak of 622.7 Kbbl/d (thousands of barrels per day). This represents an impressive year-on-year growth of 39.0% and a staggering 70.1% increase compared to May 2024.
For the year 2026, the budget of operating companies anticipates a record global outlay of US$ 13.89 billion in the oil sector. Of this total, US$ 12.373 billion (over 91%) will be exclusively allocated to the development of Vaca Muerta, driving a projected commercial surplus exceeding US$ 10.7 billion.
In contrast, the conventional segment is plummeting across all of Argentina's basins. The drop does not discriminate by region:
A report by Lumina Energy Solutions highlights that in Vaca Muerta, 'the rock decides who wins, not the Brent price' (Brent being the global benchmark for oil prices). The model shows how the cost per barrel (breakeven—the price needed to cover costs) drops as the project's scale increases. Infrastructure spending (pipelines, treatment plants) is fixed, so drilling more wells dilutes that cost.
| Well Scale | Total Investment (USD) | Breakeven (USD per barrel) |
|---|---|---|
| 45 wells (1 rig, 3 years) | 950 million | 57 USD |
| 90 wells (2 rigs) | Approx. 1.9 billion | 53 USD |
| 135 wells (3 rigs) | Approx. 2.85 billion | 51 USD |
| 225 wells (Platform) | 3.7 billion | 50 USD |
With Brent currently between 65 and 72 dollars, the entire scale ladder is profitable. Furthermore, the RIGI (Large Investment Incentive Regime) is the key piece making these projects bankable. It lowers corporate income tax from 35% to 25%, eliminates export duties, waives tariffs and VAT on imported capital goods, and locks in rules for 30 years. This saves between 3 and 4 dollars per barrel on the breakeven cost.
Companies like YPF (Argentina's state energy company), Pluspetrol, Chevron, and GeoPark already have projects in the RIGI pipeline. GeoPark, for instance, will invest about 1 billion dollars over three years to boost a block from 1,500 to 20,000 daily barrels.
Transportation infrastructure is currently at its limit following the expansion of the Oldelval pipeline system. All eyes are now on Vaca Muerta Oil Sur (VMOS), a mega-export infrastructure that is expected to be operational by early 2027. It is estimated that by 2028, its ramp-up could reach 700,000 barrels, effectively doubling Vaca Muerta's current production.
On the conventional front, expectations are shifting toward new independent operators and SMEs taking control of mature areas from which YPF has divested. Although tertiary recovery technology exists to mitigate natural decline, it requires capital, and these companies will focus on optimizing those traditional fields.
Alfredo S. Quiroga
