Argentina unveiled this week a new plan for natural gas development, looking to attract US$5 billion in company investments to revitalize gas production in the Vaca Muerta shale play and make Argentina independent from natural gas imports.
The plan, presented on Thursday in the Neuquén province home to Vaca Muerta, aims to stop the production decline, replace Argentina's natural gas imports, boost investment by attracting US$5 billion, and increase tax collection by US$2.525 billion. The gas development plan will also aim to boost local employment and work for Argentinian service companies, the government said.
"The plan is, first of all, working to guarantee the gas that Argentina needs to live and produce. This is not spending, this is investment," Argentina's President Alberto Fernández said at the event in Vaca Muerta on Thursday.
Vaca Muerta has been dubbed the 'Argentinian Permian', although its geologic properties have been compared more appropriately to the Eagle Ford. But so far, higher costs, regulatory uncertainty, and insufficient infrastructure have hampered a U.S.-style shale revolution in Argentina.
The coronavirus pandemic further hampered production efforts in Vaca Muerta and plunged the country into a new economic crisis-one of many in recent years. Argentina is again running low on U.S. dollars, while nearly half of its population lived in poverty in the second quarter.
Yet, signs have emerged in recent weeks that Argentina's once burgeoning oil industry is coming back to life. Exploration and development drilling has resumed in the Vaca Muerta, on which Argentina has pinned its hope for a petroleum-led economic recovery, Oilprice.com's Latin-America correspondent Matthew Smith wrote earlier this month.
National oil company YPF recently announced it would add three drill rigs to its unconventional oil and natural gas operations in the region. This comes after the company virtually suspended operations in the Vaca Muerta in March in response to the pandemic and the central government's measures aimed at containing the coronavirus.
By Charles Kennedy for Oilprice.com
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