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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)
Summary
Argentina broke its monthly oil production record in May, with Vaca Muerta accounting for 69% of the volumes. The shale formation’s growth is gaining strategic importance domestically and internationally, with companies pledging billions for upstream and midstream assets.
Argentina Sees 904,000 BPD in May
Led by continued growth from Vaca Muerta, Argentina broke another monthly record by producing 904,000 barrels per day (bpd) of oil in May. This was the strongest monthly pace on record, up 19.6% year on year and approximately 1.2% from April.
Shale production from Vaca Muerta accounted for 69% of volumes, another monthly record, helping establish Argentina as one of Latin America’s fastest-growing oil producers.
Vaca Muerta’s success comes from efforts to develop its vast resources and build the infrastructure needed to transport growing production. State-owned Argentine energy company YPF forecasts Argentina will surpass 1.5 million bpd from 2031 onwards as new oil fields come online.
While some companies like Exxon Mobil Corporation and Petronas sold their upstream assets in Vaca Muerta, others like Pluspetrol, Geopark, YPF and Vista announced billions to develop the reservoir’s resources.
Industrial Info Resources is tracking 469 oil and gas production projects in Argentina, totaling US$20.80 billion of investment, with most expected to be completed by the end of this decade.
Among the most expensive upstream oil projects are the Rincon de Aranda oil block owned by Pampa Energia, which has estimated investments of US$4.5 billion through 2041 and includes facilities to help reach production of 45,000 bpd. The Industrial Info Resources Global Market Intelligence (GMI) Project Database offers a highly detailed report on this project.
Meanwhile, Pluspetrol has proposed US$12 billion in investments to develop the Bajo del Choique-La Invernada blocks, targetting volumes of 100,000 bpd. YPF pledged another US$25 billion for the LLL Oil project to produce 240,000 bpd, while Vista pledged US$5.8 billion to expand productions at its assets.
The investment drive already is translating into higher operating volumes. YPF, the largest producer in Vaca Muerta, increased its shale-oil production by 39% year-over-year to an average of approximately 205,000 bpd during the first quarter of 2026. Under its strategic plan, the company also expects to double its gross production in six years, from 410,000 bpd in 2024 to 820,000 bpd by 2030.
The influx of capital to Vaca Muerta is expected to significantly support infrastructure construction and exports as Argentina increasingly relies on energy development to drive economic growth.
This investment drive has been met with national policies such as the Large Investment Incentive Regime (RIGI), which provides qualifying projects with tax, customs and foreign-exchange benefits, alongside a framework intended to improve long-term regulatory stability.
The benefits of Vaca Muerta extend beyond local development and investments to new export opportunities. According to the World Bank, Argentina’s hydrocarbon exports generated US$11 billion in 2025, and they are expected to grow to US$25 billion to US$30 billion annually by 2030, with further growth projected beyond the end of the decade.
To accommodate projected national production of more than 1.5 million bpd from the early 2030s, companies in Vaca Muerta plan to expand midstream and export capacity. The most important of these plans is the construction of the Vaca Muerta Oil Sur pipeline (VMOS), which is designed to transport up to 550,000 bpd with the potentital to expand to 700,000 bpd as production increases.
Argentina’s growing production could also gain strategic importance amid instability in the Middle East and disruptions to some of the world’s most important shipping routes.
Although Argentina will not replace the large volumes normally exported through the Arab Gulf, Vaca Muerta represents a growing supply source outside the Middle East. Together with Guyana, Brazil and possibly Venezuela, Argentine production is strengthening South America’s position as an alternative source of crude for global markets.
Key Takeaways
- Argentina produced 904,000 bpd in May, the highest monthly record.
- Shale represented 69% of the volumes produced in May.
- Billions are being pledged to develop Vaca Muerta, with production expected to surpass 1.5 million bpd.
About Industrial Info Resources
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