Opportunities Open for Huge Argentine Shale Gas Reserves as Quest Begins for Onshore LNG
Recent presidential elections in Argentina have brought the center-left Peronist party back to power and added a measure of uncertainty to the country’s promising oil and gas sector for investors. Over the past two years, reductions in drilling and development cost and enhanced production coupled with regulatory reform have positioned the country’s natural sector for expansion. In a very short time span, exploitation of the world’s second largest shale formation, Vaca Muerta, has not only helped fulfill domestic requirements reducing the need for imports, but has enabled Argentine gas to once again reach regional markets. It is therefore a critical time for Argentina to consolidate recent achievements and demonstrate it has the institutional, technical and regulatory wherewithal to offer large-scale supplies to the global market and become a leading player in natural gas.
In her October 2019 article for the LNG Journal, predating the elections, FTI Consulting’s Managing Director Liliana Diaz provided an overview of Argentina’s natural gas sector, with a particular focus on the development of unconventional shale resources in the Vaca Muerta formation. Her analysis encompassed key milestones that have been reached and the challenges that lie ahead both in terms of expanding production and finding new demand outlets. Though Argentina’s natural gas promise has been unmet in the past, this time around, incentives for stakeholders are aligned to pursue common interest that transcend political affiliation. Indeed, decisions from bellwether investors on the ground and early indications from the incoming Fernandez government suggests the Vaca Muerta development is too important to fail.
Republished with the permission of LNG Journal. Copyright © 2019. The views expressed herein are those of the author and do not necessarily represent the views of FTI Consulting, Inc. or its other professionals.
November 18, 2019
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