Argentina's Oil Output Hits Record High with YPF's New Pipeline Launch
(Reuters) — Argentina's oil production in the key province of Neuquen reached a record high in April, driven by increased activity in the huge Vaca Muerta shale formation, the local government said on Tuesday, edging up to around 390,326 barrels per day.
The embattled South American country is making a major push on energy output in Vaca Muerta, the world's second-largest shale gas reserve and fourth largest for shale oil, where state energy firm YPF spearheads development along with local and global firms.
RELATED: YPF Advances $2.5 Billion Pipeline Project to Spur Vaca Muerta Shale Oil Exports
Crude oil production rose around 19% compared to April 2023 and has notched a similar increase so far this year, the province said. It was up only slightly compared to March.
April gas production clocked in at 92.32 million cubic meters per day, an increase of 2.4% compared to the previous month and up 11.1% compared to April 2023, the local government said. It rose 8.6% in the first four months.
Argentina is looking to become an energy exporter to help overturn a deep fiscal deficit and bring in much needed dollars to stabilize the economy, with annual inflation near 300%, strict capital controls and a looming recession.
It's planning a long-term liquefied natural gas (LNG) project and building or negotiating new pipeline routes to export gas to neighboring countries, including Brazil.
On Tuesday, YPF began construction of an oil pipeline to help boost output from the Vaca Muerta formation, which will eventually allow the country to export some 135 million barrels of oil per year, the company said in a statement.
The first stage of the pipeline, which will require an investment of $190 million, will extend for 130 kilometers (81 miles) from Anelo in Neuquen to Allen, in the province of Rio Negro, both in southern Patagonia.
"At maximum operational capacity, this pipeline will allow the transport of 390,000 barrels per day, increasing by 70% oil transporting capacity from the Neuquen Basin and doubling current capacity of the Vaca Muerta core area," YPF said.
A potential second stage of the pipeline and an export terminal are still in the development stage and would require $2 billion of investment between YPF and other backers, it added.
"When completed, the Vaca Muerta Sur project will allow the export of 135 million barrels of oil per year, making Argentina one of the main exporters in the region and providing foreign currency and jobs to the country."
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