VACA MUERTA RISING: Forces Favoring Shale Development are Aligned in Argentina, for Now

Source: Diego Levit, YPF.
Sand runs out of the hands of Ruben Urrigola, operations coordinator for YPF’s sand plant, who holds one of the many jobs created by the push to develop the Vaca Muerta.

It is easy to fixate on what it will take to extract huge volumes of oil and gas from the nearly impermeable rock within the Vaca Muerta.

But in terms of the future of the huge Argentine unconventional formation, “the aboveground risk is far more important in the pace of development,” said Robert Lewis, a senior research analyst covering Latin America upstream for IHS Markit.

Scaling up this unconventional play will require spending billions of dollars a year and support from government policies that promote a stable investment climate, the ability to move money and goods in and out of the country, affordable deals with labor unions, and improved infrastructure.

For now, government policies are aligned with development. Since he was elected president in 2016, Mauricio Macri has delivered on a promise to push domestic energy growth with market-based policies reducing regulation and labor costs and encouraging international investment. Much needed infrastructure improvements have been promised, particularly efficient rail service from the coast to the oil play in the western side of the country near the border with Chile.

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VACA MUERTA RISING: Forces Favoring Shale Development are Aligned in Argentina, for Now

Stephen Rassenfoss, JPT Emerging Technology Senior Editor

01 February 2018

Volume: 70 | Issue: 2

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