Hydrocarbon production in Argentina began more than a century ago, in 1922, with the creation of Yacimientos Petrolíferos Fiscales (YPF), which holds the historic distinction of being the world’s first state-owned oil company. Established with the vision of securing national energy independence, YPF laid the foundational bedrock for what would become a complex and historically turbulent energy landscape. Over the decades, Argentina’s oil and gas sector experienced dramatic cycles of nationalization, privatization, regulatory shifts, and severe underinvestment, frequently leaving the country struggling to meet its own domestic energy consumption needs.
Today, more than a hundred years after YPF’s inception, Argentina’s energy sector is primed to enter what industry leaders and analysts describe as the best era in its history. Fueled by the prolific shale reserves of the Vaca Muerta formation in the Neuquén Basin, the country has successfully reversed a chronic energy deficit and is rapidly transforming into a major regional hydrocarbon exporter.
"Fifteen years ago, Argentina was a country with oil, and there was not even a possibility that Argentina would be an oil-producing country," Daniel Dreizzen, head of the energy consulting firm Aleph Energy, told the Herald. Vaca Muerta, he added, fundamentally altered that reality by opening up unprecedented possibilities. "Argentina is on its way to becoming an oil-producing country because it is going to export more oil and gas than it consumes itself."
Despite the soaring optimism shared by industry consultants regarding the coming years, experts also point to a distinct structural ceiling. While the Neuquén oil and gas fields are certainly capable of cementing Argentina’s status as an important regional actor in the international energy sector, they lack the sheer volume required to turn the South American nation into a global heavyweight on par with traditional superpowers.
How Did Argentina Get Here?
The turnaround in Argentina’s macroeconomic and trade indicators has been stark. The country’s energy trade balance went from a staggering US$4.3 billion deficit in 2022 to a robust US$5.6 billion surplus in 2024, marking the nation’s first annual energy surplus since 2011. This pivotal shift has relieved immense pressure on Argentina’s foreign currency reserves and stabilized the broader economy.
Building on this momentum, the country is currently registering record-breaking energy exports. Between January and August 2026, the energy sector accumulated a US$7.8 billion surplus, surpassing the total figures recorded during the entirety of 2025, according to official figures published by the national statistics bureau, INDEC.
"This is the best moment in Argentina’s oil and gas 100-plus-year history," said prominent energy consultant Daniel Gerold, capturing the sentiment shared across the domestic industry.
Nicolás Arceo, head of the Economía & Energía consulting firm, highlighted the unprecedented scale of current operations, noting that Argentina currently boasts the "highest production level in its history."
"It broke the production records of the late 90s and early 2000s in oil and natural gas," Arceo added. "And it has a resource development outlook that it has practically never had in Argentine history."
This historic output is the direct result of massive capital injections, technological advancements in horizontal drilling and hydraulic fracturing, and the gradual stabilization of transport infrastructure, most notably the construction of the Néstor Kirchner Gas Pipeline, which has alleviated historic bottlenecks out of the Neuquén Basin.
Production Output Set for Exponential Growth
The forward-looking outlook for the Argentine energy sector over the remainder of the decade is even more promising, supported by a wave of private and joint-venture capital commitments.
When combining the oil and gas projects already formally approved under the Large Investment Incentive Regime (RIGI, by its Spanish acronym), infrastructure works already actively underway, and major projects officially announced by corporate stakeholders, the total universe of committed investments approaches a staggering US$90 billion.
The core of these transformative projects is tightly concentrated in two main areas: the sprawling Vaca Muerta shale oil and gas field in Neuquén province, and ambitious, multi-billion-dollar initiatives designed to establish a domestic liquefied natural gas (LNG) export industry.
Daniel Dreizzen explained that Argentina currently produces approximately 900,000 barrels of oil per day, with roughly 700,000 barrels originating directly from Vaca Muerta. "If everything goes well, within 5 years it will reach 2 million barrels per day; that is more than doubling current production," he estimated.
Similarly, Juan José Carbajales, director of the energy consultancy Paspartú, projected that by 2032 Argentina could comfortably export 1 million barrels of oil per day to international markets.
"It is not insignificant because it is the same amount that Venezuela has today," Carbajales noted, emphasizing that very few nations possess the geological capacity to increase their exportable production to such an extent within a compressed timeframe.
In the natural gas sector, the equation takes on a different strategic dimension due to the immense technical and financial requirements of liquefaction. Arceo estimated that if all proposed projects linked to this sector come to fruition, Argentina will achieve a total liquefaction capacity of around 18 million tonnes per annum (MTPA). Carbajales raised that projection even higher, suggesting capacity could reach 24 MTPA by 2032.
While Argentina has historically lacked large-scale gas liquefaction infrastructure, two major projects are currently in progress to make large-scale LNG exports a commercial reality.
The first major initiative is Argentina LNG, an ambitious undertaking backed by an estimated total investment of US$51 billion. The project involves the installation of floating liquefied natural gas (FLNG) units stationed off the coast of Río Negro province. YPF CEO Horacio Marín announced during Argentina Week in Paris that the final investment decision (FID) is scheduled to be officially signed on November 26, alongside key international partners, including Italy’s Eni and the Emirati firm XRG.
The second major initiative is led by Southern Energy and the SASE consortium, a powerful corporate partnership comprising Pan American Energy (PAE), YPF, Pampa Energía, Harbour Energy, and Golar LNG. Construction has already begun on the San Matías Pipeline—a dedicated 500-kilometer pipeline built exclusively for export purposes—with the stated goal of receiving the project’s first liquefaction vessel in the second half of 2027.
Establishing this export infrastructure will allow local LNG production to directly access lucrative European and Asian consumer markets.
"All international analysts see Southeast Asia as the growth sector for hydrocarbon demand over the next two or three decades," Arceo highlighted, pointing to long-term demographic and industrial trends driving global energy consumption.
Despite the exceptionally bright domestic horizon, the four independent specialists consulted by the Herald agreed that even this robust projected growth in hydrocarbon production will be insufficient to transform Argentina into a global heavyweight on the scale of the United States, Russia, or the major Middle Eastern oil-producing nations.
"Global oil prices are not going to collapse because Argentina increases its exports like they would if Saudi Arabia were to do so," Gerold explained, pointing to the immense market share commanded by OPEC linchpins.
Carbajales echoed this assessment, noting that while Argentina is well-positioned to become a "respectable player" within the international oil sector, its output will ultimately "not move the needle" on global price formation.
Arceo explained that the country could successfully consolidate its position among the top 15 oil producers globally, representing roughly 1.5% to 2% of total global supply. However, this level of output leaves Argentina sitting far behind the United States, Saudi Arabia, and other core OPEC members.
On a regional level, Argentina’s projected production levels are not even enough to secure the title of South America’s largest producer. Neighboring Brazil currently produces approximately 4 million barrels of oil per day, while Guyana—which until recently maintained a production capacity similar to Argentina’s current baseline—is aggressively expanding its offshore operations with the goal of reaching 1.7 million barrels per day by 2030.
In the global LNG market, however, Argentina’s strategic positioning is viewed as slightly more favorable. Gerold estimated that Argentina could account for just over 2% of global production by the next decade.
"By 2032, Argentina will export 18 MTPA of LNG in a market that might be 700 MTPA by then," he noted.
Carbajales offered a similarly optimistic perspective, arguing that Argentina could indeed prove to be a highly relevant actor internationally, primarily because the global market suffers from a relative scarcity of new, stable LNG exporters.
The country’s geopolitical relevance, he added, is tied less to raw volume and more to the fact that its exports will provide a vital "new window" for energy demand from Europe and Asia, allowing major importing nations to diversify their geopolitical supply risks.
"That grants Argentina a prominent place at negotiating tables, with a relevant asset that it is already using for its sovereignty claim over the Malvinas Islands," Carbajales said.
Looking further ahead, Dreizzen did not rule out the possibility of an even greater structural surge in Argentine hydrocarbon production in the coming decades, provided that new geological deposits are successfully explored and certified across the country’s vast sedimentary basins.
Among the potential developments highlighted by Dreizzen are the Palermo Aike shale formation located south of Santa Cruz province and extending into Tierra del Fuego, the D-129 Formation situated between the provinces of Chubut and Santa Cruz, and high-potential offshore exploratory deposits located within the Argentine Sea.
Editorial disclaimer: Although the United Kingdom refers to the disputed Atlantic archipelago as the "Falkland Islands," Argentina strongly contests this designation. The Buenos Aires Herald uses "Malvinas" to refer to the islands.
