Argentina's oil and gas production is close to the highest levels in its history. In September 2024 the country produced 738,000 barrels a day of crude, 15 per cent more than a year earlier and the most in any month since 2003. Gas output averaged 5.0 billion cubic feet a day in the first nine months of 2024, up 5.2 per cent on the same period of 2023, and reached 5.4 Bcf/d in August, the highest monthly figure in 21 years. Between January 2021 and September 2024, crude production rose 50 per cent and gas production 27 per cent.
Almost all the growth comes from one formation. Vaca Muerta, mainly in Neuquén province, supplied 58 per cent of Argentina's crude and 74 per cent of its gas in September 2024. The US Energy Information Administration estimates it holds 308 trillion cubic feet of technically recoverable shale gas and 16 billion barrels of technically recoverable shale oil and condensate, placing Argentina among the world's top five holders of shale resources.
Two transitions are under way. The first, from gas importer to self-sufficient producer in winter, is largely complete. The second, from self-sufficient producer to LNG exporter, has only just begun, and it will be harder.
From winter importer to balanced market
For years, Argentina's gas market had a seasonal problem. Demand for heating and power peaks in the southern hemisphere winter, from June to August, while storage capacity is limited. Domestic production could not cover the peak, so the country imported LNG cargoes every winter, often at high prices, through floating regasification terminals.
Vaca Muerta growth and new pipelines have changed that. The EIA notes that rising production and several new pipeline projects have reduced LNG imports. The most important is the trunk line built from Neuquén toward Buenos Aires and the populous centre of the country, which allows more shale gas to reach demand centres in winter. With more domestic gas reaching the market, the need for imported winter cargoes has fallen sharply.
That is already a significant gain. Each LNG cargo not imported saves foreign currency for an economy that has persistently struggled with dollar shortages. It also reduces exposure to global price spikes of the kind seen in 2022.
Oil exports are already growing
On the oil side, the shift to exporter is well advanced. Argentina's crude exports grew by an average of 33 per cent a year, from 30,000 barrels a day in 2017 to 128,000 barrels a day in 2023, and shale crude made up about 70 per cent of exports in 2023. Additional pipeline capacity from Neuquén to the Atlantic coast is being developed to support further growth.
Oil exports are relatively straightforward to scale. Crude can be shipped from existing ports with modest additional infrastructure, and buyers in the United States, Brazil, Chile and elsewhere are already taking Argentine barrels.
Argentina sits a long way outside the usual conversation about non-OPEC supply. When the EIA set out its near-term expectations in March 2024, it named four countries as the main sources of growth in liquids outside OPEC+: the United States, Canada, Brazil and Guyana, the last three adding roughly 0.3 million barrels a day each through 2025. Argentina was not on the list. Yet its crude output rose by about 96,000 barrels a day between September 2023 and September 2024 alone. If that pace continues, Vaca Muerta becomes a fifth contributor that global balances have tended to understate, small next to the United States but comparable in annual increments to the floating production vessels off Guyana.
The LNG step
Gas exports are a different matter. Argentina already sells some gas by pipeline to Chile and, increasingly, has the potential to supply Brazil through Bolivian infrastructure as Bolivian production declines. But reaching global markets requires liquefaction.
The first concrete step came in July 2024, when Golar LNG signed definitive agreements with Pan American Energy for a 20-year deployment of a floating liquefaction vessel in Argentina. The project would use Golar's FLNG Hilli Episeyo, with nameplate capacity of 2.45 million tonnes a year, and is expected to start exports in 2027. Golar will hold 10 per cent of Southern Energy, a joint venture with PAE that will buy domestic gas and market the LNG. Golar describes it as a possible first phase of a larger multi-vessel development involving other Argentine producers.
Separately, YPF has pursued a much larger onshore LNG project with international partners, though its scope and timing have shifted.
Why LNG is harder
Three obstacles stand between Argentina and a substantial LNG export industry.
The first is seasonality. Argentina's own demand peaks in winter. An LNG plant needs steady feed gas year round. Either production must grow enough to supply both winter domestic demand and steady exports, or the export plant must accept lower volumes in winter. Floating liquefaction, which can in principle operate seasonally, is one reason the first project uses that model.
The second is infrastructure. Vaca Muerta is far inland. Exporting LNG at scale requires dedicated pipelines from Neuquén to a coastal site, along with the liquefaction capacity itself. Those are multi-billion dollar investments that take years.
The third is policy credibility. Argentina has a long history of changing energy regulation, export restrictions and currency controls. LNG projects require 20-year commitments from buyers and lenders. The current government has introduced a large-investment incentive regime and loosened some export controls, but investors will price in the risk that a future government reverses course.
What the numbers support
The production numbers support a cautious optimism. Vaca Muerta has shown it can grow output steadily, and its well productivity has improved. Oil exports are rising quickly, and the end of winter LNG imports has already improved the trade balance.
LNG exports at scale are a matter for the late 2020s at the earliest. The first floating unit, if it starts in 2027 as planned, would be modest by global standards. A larger industry depends on pipelines, investment and policy stability that are not yet in place. Argentina has the resource, and the geology has repeatedly surprised on the upside. It has completed the first transition. The second will test whether it can offer the long-term certainty that LNG requires.