Report: Vaca Muerta Oil Production Could Grow to 1 Million BBL/d by 2030

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Oil production from Argentina's Vaca Muerta region could increase from 291,000 barrels per day (BBL/d) to 1 million BBL/d in the next seven years, according to a report by Rystad Energy. Nevertheless, takeaway capacity and a stable rig count will be key for developing the shale reservoir, based on the company's research.

Vaca Muerta has the world's second-largest shale gas resources and the fourth-biggest non-conventional oil resources.

According to the report, some 30 active rigs and a drilling speed of 1.1 wells per rig each month would lead to 400 new wells yearly to expand the current capacity. The company assumes a 70-30 oil-gas ratio well drilling, leading to 280 oil wells drilled annually.

In the first three months of this year, companies in Vaca Muerta drilled 121 new oil and gas wells, compared to 102 during the same period last year.

"Vaca Muerta could hold the key to Argentina's future energy economy following more than a decade of oil production declines. While major challenges lie ahead, reaching the important 1 million barrel-per-day threshold would change the country's narrative, reduce its reliance on imports and become a key regional and global oil market player," said Alexandre Ramos, head of shale research at Rystad Energy.

The oil production volumes and the number of new wells offer a strong indicator that the energy industry is focusing on the development of the shale reservoir. Meanwhile, energy majors such as Shell plc (NYSE:SHEL) (London, England), Chevron Corporation (NYSE:CVX) (San Ramon, California), Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas), and TotalEnergies SE (NYSE:TTE) (Courbevoie, France) have increased their oil production by 62% from 2021 to 2022, according to the report.

With higher oil production, Argentina could see $20 billion in revenues from Vaca Muerta based on calculations in the report, with oil flowing to regional markets and places like the U.S. and Europe.

Nevertheless, with higher oil production, the problem of transportation will emerge. Implementing midstream projects will be key to guaranteeing the development of energy assets in Neuquen in Vaca Muerta. According to the report, the province should have more than a million BBL/d in takeaway capacity by 2025.

Argentina's government is focusing on and encouraging midstream expansion to guarantee the flow of oil and gas through the nation. An example is the construction of the Nestor Kirchner gas pipeline, which is planned to ease natural gas transportation from the shale reservoir. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipelines Project Database can click here for a list of Nestor Kirchner pipeline project reports.

Finally, the report highlights the importance of expanding the port of Puerto Rosales in Bahia Blanca to keep up with higher volumes from Neuquen and guarantee Argentina's status as a net oil exporter.

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