Local and international energy companies are vying for additional exploration blocks in Argentina\u2019s Vaca Muerta shale basin as the Middle East crisis and the blocked Strait of Hormuz are reigniting a global race to tap resources outside conflict zones. \u00a0\u00a0\u00a0<\/p>\n
What was a predominantly U.S. business until a few years ago, shale exploration and production is now gaining momentum outside North America. And Argentina\u2019s Vaca Muerta is top of the list of oil and gas companies, including U.S. shale giants, as a de-risked basin with proven geology that\u2019s far away from having to rely on the Strait of Hormuz or any other corridor in the Middle East to ship barrels out.<\/p>\n
Interest in the new licensing round for 15 blocks in Vaca Muerta\u2014the biggest auction in the basin in a decade\u2014is expected to be high as the U.S. shale boom goes global and energy companies are shifting their bets from conflict zones to safer jurisdictions, analysts say. \u00a0<\/p>\n
Vaca Muerta\u2014Spanish for \u2018dead cow\u2019\u2014has been dubbed the\u00a0Argentinian Permian, although its geologic properties have been\u00a0compared more appropriately to the Eagle Ford<\/a>.<\/p>\n The shale play is\u00a0estimated to hold<\/a>\u00a0recoverable resources consisting of 16 billion barrels of oil and 308 trillion cubic feet of natural gas. Those numbers make the Vaca Muerta the world\u2019s second-largest shale gas deposit and the fourth-biggest shale oil resource. Related: Xi-Trump Summit Disappoints as Oil Bulls Regain Momentum<\/a><\/p>\n After a slow start earlier this decade, Vaca Muerta is now booming, with crude oil production increasing by about 16% from last year, and now topping 800,000 barrels per day<\/a> (bpd). By the end of the decade, and possibly sooner, the Argentinian shale play will be able to deliver 1 million bpd of crude oil, as well as a lot of natural gas, industry and analysts say.<\/p>\n Vaca Muerta has already made Argentina\u00a0the fourth-largest<\/a>\u00a0oil producer in Latin America\u2014a position that may improve in the future as the government prioritizes the development of the local energy industry, encouraging infrastructure projects aiming to boost the offtake capacity of the Vaca Muerta.<\/p>\n U.S. shale giant Continental Resources, the company founded by Harold Hamm, earlier this year doubled down on its shale expansion outside the U.S. with an acquisition of stakes in four Vaca Muerta<\/a> blocks.<\/p>\n \u201cVaca Muerta is one of the most compelling shale plays in the world, and we’re thrilled to continue to invest in Argentina and build Continental’s position through this agreement with Pan American Energy,\u201d Continental Resources president and CEO Doug Lawler said<\/a> in January.<\/p>\n \u201cWe take a long-term view of resource development, regardless of geography. As I like to say, ‘The rock doesn’t know what country it’s in.’\u201d<\/p>\n The prospects for Vaca Muerta look bright for the coming years, especially as the Neuqu\u00e9n province launches the biggest licensing round in the shale play in a decade, offering 15 blocks<\/a> up for grabs\u2014more than double the number of blocks in the previous auction.<\/p>\n Amid the global oil supply shock this year, Vaca Muerta tops the shortlist of regions where the next generation of reliable barrels will come from, analysts at Rystad Energy said<\/a> this week.<\/p>\n The Argentinian shale play is already outperforming U.S. plays such as the Permian, Bakken, and Eagle Ford on well productivity measures, Rystad Energy reckons, and expects crude production from Vaca Muerta to top 1 million bpd by the end of the decade.<\/p>\n \u201cArgentina is offering international companies their best organic entry point into Vaca Muerta in a decade,\u201d Jai Singh, Head of US Oil & Gas Research at Rystad Energy, said, referring to the bid round of 2026.<\/p>\n \u201cThe basin is maturing fast, infrastructure is being built at pace, and the bid terms are designed to attract operators who can bring North American shale expertise to bear.\u201d<\/p>\n According to Singh, \u201cThis bid round is the moment that the world\u2019s most important non-US shale play formally invites the world in.\u201d<\/p>\n By Tsvetana Paraskova for Oilprice.com<\/p>\n