HOUSTON—Argentina’s sleeping giant shale formation, the Vaca Muerta or ‘Dead Cow’ in the country’s Neuquen Province, is on par with the U.S. Permian Basin and Haynesville basins in terms of resources. Still, its development and production lag amid numerous persistent headwinds.

Activity in Neuquen is at an all-time high but growth will stall without incremental rigs, Rystad Energy Head of Shale Well Research Alexandre Ramos-Peon told about 160 attendees Sept. 29 at the Vaca Muerta Shale Day in Houston 2022 event at the Houstonian Hotel, which was hosted by the Instituto Argentino del Petróleo y del Gas or IAPG.

Ramos-Peon highlighted problems owing to a lack of available equipment while saying that frac fleet availability was “a massive bottleneck” with activity levels still extremely low. Other headwinds confronting development of the Vaca Muerta formation include a lack of gas takeaway capacity due to Argentina’s major pipelines operating near maximum capacity, the executive added.

Executives from Shell Argentina, Chevron Corp., TotalEnergies SE and Exxon Mobil Corp. highlighted some investment fears and headwinds their companies confront in Argentina during an operators panel discussion.

Companies in Argentina “need a competitive and stable regulatory framework… and access to foreign currency,” Shell Argentina Country Manager Ricardo Rodriguez said during the event. “Vaca Muerta will not be completely developed without solving some of these issues,” said Rodriguez, who recently replaced outgoing Country Manager Sean Rooney.

“Fiscal conditions... and certainty is needed,” Chevron General Manager Asset Development Mike Maneffa said, adding that one or two pipelines will not resolve all the infrastructure issues.

TotalEnergies Technical Director of Total Austral Operations Joaquin Lo Cane said “clear and sustainable rules” were needed as well as reasonable selling prices while Exxon Mobil Development Manager Bakken, Argentina and Central U.S. Tabitha Hensley said “more foreign exchange and macro-economic predictability was needed.”


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Vaca Muerta Potential

Argentina is home to technically recoverable shale gas resources estimated at 802 Tcf, according to the U.S. Energy Information Administration (EIA), which continues to draw the attention of investors. China is home to the largest accumulation of technically recoverable shale gas resources with a whopping 1,115 Tcf.

The Vaca Muerta formation is home to recoverable resources of 308 Tcf, according to the EIA, putting it on par with the U.S. Permian Basin and Haynesville, which hold around 297 Tcf and 304 Tcf, respectively, according to Rystad data. 

The shale formation is located in Argentina’s Neuquen Basin and far from the country’s main consumption centers such as Buenos Aires. In terms of technically recoverable shale resources, the formation holds 53% of the basin’s resources as well as 38% of the country’s resources, according to the EIA.

Looking ahead, Neuquen’s average oil production is expected to reach 750,000 bbl/d in 2030 compared to 380,000 bbl/d in 2022 while gas production is expected to reach 5 Bcf/d compared to 3.3 Bcf/d, according to Argentine company Tecpetrol. 

Despite the resource comparisons and projections, development of the Vaca Muerta has progressed at a seemingly very slow pace while production is still far from its projected potential.


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The government of Argentina continues to move forward with efforts and agreements to accelerate development of the Vaca Muerta by attracting investors and expanding infrastructure capacity such as the Gasoducto Néstor Kirchner, Neuquen Province Governor Omar Gutierrez said during the event. 

This year Argentina’s energy-related commercial balance deficit of $8 billion would have been $14 billion… Vaca Muerta generated $2 billion in exports and savings of $4 billion from the substitution of LNG imports through 22 cargoes versus 52 cargoes, the Neuquen Province official said.

“Just 8% of the Vaca Muerta is undergoing industrial development… and to reach the 2030 goals we’ll need to reach 25%,” Gutierrez said as he paced the floor and answered questions. “With investments in production… Argentina at the hands of Vaca Muerta will achieve energy auto-sufficiency in 2024,” the executive said in his concluding remarks.