Argentina's energy sector entered 2023 on an unusually strong footing. After years of declining conventional hydrocarbon production and chronic energy deficits that forced the country to spend billions of dollars on imports, the scaling up of unconventional resources — above all in the Vaca Muerta shale formation in Neuquén — began transforming the national energy balance. Total primary energy production reached 83.3 million tonnes of oil equivalent (MTOE) in 2023, a figure that reflects both the long-term structural shift toward unconventional resources and the continued importance of the country's existing conventional fields, hydropower capacity and growing renewable energy portfolio.
The national energy mix: hydrocarbons still dominant
Natural gas remained the single largest primary energy source in 2023, accounting for 44% of total primary energy production. Oil followed at 35%, making hydrocarbons collectively responsible for nearly four-fifths of Argentina's energy supply. Hydropower contributed 9% of total production, supported by a network of large dams on the Limay, Neuquén and Paraná river systems. Nuclear energy — supplied by three operating reactors (Atucha I, Atucha II and Embalse) — provided 3%, while renewables reached 8%, driven by wind farms in Patagonia and solar installations across the northwest. The renewable share remains below Argentina's own targets but reflects genuine progress compared to the near-zero levels a decade ago.
Vaca Muerta: the unconventional revolution
The central driver of Argentina's production growth in 2023 was Vaca Muerta, the shale formation covering approximately 30,000 square kilometers primarily in Neuquén Province that holds an estimated 308 trillion cubic feet of technically recoverable shale gas and 16.2 billion barrels of tight oil — making it the world's second-largest shale gas deposit and fourth-largest tight oil deposit according to the U.S. Energy Information Administration. Unconventional gas production grew 26% year-on-year in 2023, as investment from YPF, Shell, TotalEnergies, Chevron and other operators continued to expand well counts and infrastructure. Total oil production for the country reached 34 million cubic meters in 2023, a ten-year high. Natural gas production peaked at 145 million cubic meters per day during the winter demand peak, compared to approximately 120 million cubic meters per day just three years earlier.
The paradox: record production alongside energy imports
Despite the impressive production figures, Argentina continued to spend heavily on energy imports in 2023 — approximately $4.2 billion USD, primarily on liquefied natural gas (LNG). The reason is structural: Argentina's pipeline network was built to supply gas from conventional fields in the south to population centers in the north, and does not yet have sufficient reverse-flow capacity to distribute Vaca Muerta production efficiently to all markets. During winter months, when demand from households and industry spikes, domestic production cannot reach all end users at sufficient volumes, requiring supplementary LNG imports via regasification terminals at Escobar and Bahía Blanca. IEASA (the former state energy company Enarsa) managed these import contracts. This import requirement is expected to decline substantially as the Gasoducto Néstor Kirchner — a major new 573-kilometer pipeline from Tratayén in Neuquén to Salliqueló in Buenos Aires Province — came online progressively from 2023.
Prospects and the export question
The longer-term question for Argentina's energy sector is whether the country can translate production growth into net energy exports at scale — a transformation that would significantly improve the trade balance and reduce pressure on foreign currency reserves. LNG export infrastructure is not yet built, and pipeline connections to neighboring markets remain limited. However, gas exports to Chile via the Trans-Andean pipeline system resumed and expanded in 2023, a meaningful shift from the years when Argentina had been a net gas importer from Bolivia. Our dashboard on the national energy balance tracks production, consumption and net trade for all energy sources over time, and our dashboard on energy consumption provides sector-level breakdowns of how Argentina uses the energy it produces. Together they illustrate the structural transformation underway in one of the country's most strategically important economic sectors.
