Located in the Neuquén Basin of Argentine Patagonia, Vaca Muerta is one of the world's largest shale oil and gas formations — estimated to hold the second-largest shale gas reserves and fourth-largest shale oil reserves globally. Commercial development began in earnest around 2013 and has expanded dramatically since, with 2024 marking a series of production milestones that underline the formation's growing strategic importance for Argentina's energy self-sufficiency and export ambitions.
Unconventional oil and gas: breaking records
By October 2024, unconventional (shale) oil production from Vaca Muerta reached approximately 387,000 barrels per day — representing 43% of Argentina's total national crude oil output and a 22% increase over the same month in 2023. Unconventional gas production reached 90 million cubic meters per day, covering around 55% of national gas consumption. Total national crude oil production for 2024 is estimated at approximately 38.7 million cubic meters — a 15-year high. Our dashboard on the national energy balance compiles production, consumption, and trade data across all energy sources in an interactive format.
Investment and the role of YPF
YPF, the partially state-owned energy company that operates the largest portfolio of blocks in Vaca Muerta, increased its capital investment by approximately 35% in 2024, reaching a total of around $5.2 billion. This investment supported the drilling of hundreds of new horizontal wells and the construction of water treatment and pipeline infrastructure. International oil majors also maintained active presence: Shell, TotalEnergies, and Pan American Energy continued development programs in their respective concession areas. The RIGI (Régimen de Incentivo para las Grandes Inversiones — Large Investment Incentive Regime) introduced in 2024 offered tax and regulatory stability over 30-year horizons, generating renewed interest from global energy investors in longer-cycle Vaca Muerta projects.
Energy exports: a structural shift
The energy sector's transformation from net importer to net exporter is one of the most significant structural shifts in Argentina's macroeconomic position. Energy exports reached approximately $4.1 billion in 2024, up sharply from $1.8 billion in 2023. This growth was driven by LNG shipments from the Bahía Blanca export terminal, expanded pipeline exports of natural gas to Chile and Brazil (via the reversed Norte Grande pipeline), and growing crude oil exports. The reversal of the energy trade deficit — which had cost Argentina billions in foreign exchange annually during the 2010s — now contributes positively to the overall trade balance, providing an additional source of dollar inflows beyond the agricultural sector.
Domestic consumption and the transition challenge
While production growth is substantial, Argentina's domestic energy consumption patterns pose their own challenges. Natural gas remains the dominant fuel for residential heating and electricity generation, and seasonal demand peaks — particularly in winter — continue to require careful system management. Our dashboard on energy consumption tracks residential, commercial and industrial usage patterns, as well as the gradual shift in the electricity generation matrix. Expanding renewable energy capacity alongside Vaca Muerta's hydrocarbon output is a stated long-term policy objective, though the pace of transition depends heavily on investment conditions and grid infrastructure development.
The broader significance of Vaca Muerta for Argentina extends beyond energy: it represents a potential source of sustained foreign exchange earnings over decades, with the prospect of transforming the country's chronic balance-of-payments vulnerabilities. Whether this potential is realized will depend on the policy and investment environment, global energy price trajectories, and the speed of infrastructure buildout to export markets.
