The expert pointed to the growing role of Argentina in the oil market

Argentina is a new driver of oil production outside OPEC+. The development of the Vaca Muerta shale formation will allow this country to gain a foothold in the top three producers in South America, says Sergey Tereshkin, CEO of Open Oil Market. He told Izvestia about this on April 14.

"The role of South America in the oil market is usually discussed in the context of the dynamics of oil production in Venezuela or the growth of supply in Brazil and Guyana, including through the commissioning of floating installations in the South Atlantic and the Stabroek block, which has estimated hydrocarbon reserves of 11 billion barrels of oil equivalent. However, in recent years, Argentina has been playing an increasingly important role in the global market," he said.

According to the Energy Information Administration (EIA), oil and gas condensate production in this country in 2024 reached 890 thousand barrels per day (b/d). The indicator exceeded the level of 2021 by a quarter, the expert said.

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According to him, the driver of production growth in Argentina is the Vaca Muerta shale formation, located in the central part of the country and similar in its characteristics to a number of formations in North America. The sulfur content in the oil produced at Vaca Muerta is 0.5%, only slightly higher than for Bakken (0.1%) and Eagle Ford (0.2%) grades, which are produced in the United States at the formations of the same name.

"According to some estimates, the production break-even limit at Vaca Muerta is $34 per barrel, whereas for a number of the largest formations in the United States it ranges from $34 to $51 per barrel," Tereshkin said.

He added that other similar characteristics include the content of organic carbon in the extracted raw materials: the higher this indicator, the higher the potential flow rate of wells, that is, the average daily volume of extraction of raw materials per well. The organic carbon content on Vaca Muerta ranges from 3% to 10%, and on the Bakken formation — from 4% to 20%.

"Thanks to the development of Vaca Muerta, oil and gas condensate production in Argentina will exceed the 1 million bpd mark in the coming years, as a result, the country will gain a foothold in the top three oil producers in South America," Tereshkin concluded.

Earlier, on April 3, it became known that eight OPEC+ countries participating in agreements on voluntary production cuts decided to change the production schedule and increase oil production in May by 411 thousand barrels per day. The report of the organization noted that this was made possible due to the improvement of the oil market and a positive outlook, however, the increase in production may be suspended or canceled depending on market conditions.