Argentina Likely to Surpass Colombia in South American Oil Production

Argentina is poised to overtake Colombia as one of South America’s top three crude oil producers, driven by increasing shale drilling in the Vaca Muerta region. Approximately 60% of the country’s crude output now comes from shale, with projections indicating a return to production levels not seen in over two decades due to favorable government policies and an increase in drilling rigs planned for next year.

Argentina is on the brink of surpassing Colombia as one of the top three crude oil producers in South America, primarily due to an upswing in shale drilling activities. The Vaca Muerta shale region has emerged as a focal point for this growth, boosted by favorable governmental policies under President Javier Milei. Currently, shale oil constitutes approximately 60% of Argentina’s crude output, positioning the country to achieve production levels not seen in over two decades. The anticipated increase in drilling rigs in the Vaca Muerta region for the coming year further indicates the potential for significant expansion in Argentine oil production.

The oil production landscape in South America has been significantly impacted by advancements in shale drilling techniques, particularly in Argentina and Colombia. Argentina’s Vaca Muerta shale formation is one of the largest shale deposits in the world, drawing considerable investment and attention. The shift in oil production dynamics is largely influenced by governmental policies aimed at stimulating the economy and attracting foreign investment, enhancing Argentina’s capacity to increase its crude output and potentially alter its position in the regional oil market.

In summary, Argentina’s rapid expansion in shale oil production, particularly in the Vaca Muerta region, positions the nation to potentially overtake Colombia as a leading crude producer in South America. The business-friendly policies of President Javier Milei and the expected inflection in drilling activities underscore the significant transformation within the Argentine oil sector, possibly achieving production figures not observed in the past 20 years.

Original Source: news.bloomberglaw.com