Argentina Hits Two-Decade Oil Output Record

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--In July, Argentina produced 811,000 barrels per day (BBL/d) of oil, about 18.5% more than the same month last year and the strongest monthly output since 1999, according to numbers published by the energy ministry. This sustained increase in production can be directly attributed to the ongoing development of Vaca Muerta, the nation's shale reservoir.

Reflecting this trend, non-conventional oil output from Vaca Muerta represented 63.4% of Argentina's total output. This figure marks a systematic increase since July 2014, when it accounted for only 3% of the country's output.

This upward momentum was not limited to oil. Gas production during July also recorded the highest monthly pace since 2000, reaching 160.6 million cubic meters per day (MMm3/d). These volumes represented a year-on-year increase of 5.7%, with shale production from Vaca Muerta accounting for over 50%.

Supporting these higher production volumes is the development of new midstream capacity aimed at creating new transportation routes for Vaca Muerta's output.

For example, in July, Oldelval announced the construction of Duplicar Norte, a new 207-kilometre-long oil pipeline with a capacity of up to 280,000 BBL/d, connecting Puesto Hernandez to Allen. The asset is expected to be operational by the end of next year and cost US$380 million.

Another major initiative, the Vaca Muerta Oil Sur (VMOS) project, spans for 437 kilometres and has a capacity of 180,000 BBL/d in Phase I, with an expansion to 550,000 BBL/d in Phase II. This project could be further extended to transport 700,000 BBL/d.

Specifically, the pipeline will connect Allen to Punta Colorada, where an export terminal will be constructed. This infrastructure will enable oil-producing companies operating in Vaca Muerta to access an additional terminal for exports.

Construction of the VMOS project began this year, and, like the Duplicar Norte pipeline, it is expected that its phase I is operational by 2026. The project is attracting investments of US$3 billion across all its phases and is forecasted to generate US$15 billion yearly for Argentina through oil exports by 2030.

In terms of natural gas, the planned Argentina floating liquefied natural gas (LNG) vessel and Argentina LNG (Umbrella ID) projects are set to complement these developments. The facilities will allow Vaca Muerta to export its natural gas output and advance Argentina's position as a key LNG exporter.

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