Argentina Poised to Surpass Colombia as South America’s Top Oil Producer

Argentina’s shale drilling surge may soon enable it to surpass Colombia as a top-three crude oil producer in South America. The Vaca Muerta region, bolstered by pro-business government policies, now produces 60% of Argentina’s crude, aiming for production levels not seen in over 20 years, with more rigs expected next year.

Argentina is on the cusp of surpassing Colombia as one of the top three crude oil producers in South America, thanks to a surge in shale drilling activity. The country’s Vaca Muerta shale region is witnessing accelerated drilling efforts, driven by the pro-business policies implemented by President Javier Milei’s administration. Currently, shale oil constitutes approximately 60% of Argentina’s crude output, leading the nation toward production levels not experienced since the early 2000s. The United States Energy Information Administration anticipates further increases in drilling activity, with additional rigs expected to be mobilized to Vaca Muerta in the coming year. This expansion underscores the strategic infrastructural developments aimed at bolstering production in this region.

The context of Argentina’s shale oil boom lies in the Vaca Muerta formation, which is among the largest shale reserves globally. A favorable investment climate, fostered by the current Argentine government, has attracted significant foreign investment and expertise in shale extraction techniques. This shift not only positions Argentina to potentially outpace Colombia in crude production but also represents a broader trend of increased energy independence in South America amid fluctuating global oil prices and changing market demands.

In summary, Argentina is poised for a significant leap in crude oil production, primarily attributed to enhanced drilling activity in the Vaca Muerta region and the supportive policies of President Milei. As the country reaches for levels of production last seen two decades ago, the potential exit of Colombia from the top three producers in the region highlights the shifting dynamics within South America’s energy landscape. Continued investment and infrastructure development will likely be key factors influencing this evolution.

Original Source: news.bloomberglaw.com