Argentina's oil production hit a record 902,920 barrels per day in July, with shale output from the Vaca Muerta formation now accounting for 72% of the total. Chevron, Continental Resources and billionaire Peter Thiel are among the investors pouring capital into the play, and oil has become Argentina's second-largest export after soybeans.
Argentina's oil output climbed to a record 902,920 barrels per day in July, almost 1% above June and 12% higher than a year earlier. Shale production from the Vaca Muerta formation in Neuquén Province drove the gain, rising 26% year over year to an all-time high of 648,347 barrels per day. As a result, shale oil now makes up a record 72% of Argentina's total petroleum output.
Conventional output keeps sliding
Conventional oil fields, however, are pulling in the opposite direction. Government data shows July conventional production of 254,574 barrels per day, down 2% month over month and 13% year over year — output that is now 50% lower than a decade ago. Natural gas told a similar story: total production slipped 0.5% month over month and 1.6% year over year to 5.6 billion cubic feet per day, even as shale gas climbed almost 4% year over year to make up 70% of the country's gas output, also a record.
Foreign drillers pile into Vaca Muerta
Low breakeven costs of $36 to $45 per barrel are pulling foreign capital into the formation. Continental Resources, founded by billionaire Harold Hamm, joined Phoenix Global Resources to bid for acreage in the Vaca Muerta's August 2026 licensing round, agreeing to acquire a 50% stake in Phoenix in a joint venture with Mercuria Energy Group. Billionaire venture capitalist Peter Thiel recently acquired a 1% interest in Vista Energy worth around $76 million.
Chevron is making a larger bet still, with plans to invest $13.8 billion to develop its El Trapial acreage in the formation's north under President Javier Milei's Incentive Regime for Large Investments. The framework guarantees regulatory, tax and foreign exchange stability for 30 years on qualifying projects above $200 million. In August, state-controlled YPF applied for RIGI incentives to develop a $51 billion liquefied natural gas project alongside Italy's Eni and Abu Dhabi's XRG, following an earlier $25 billion RIGI plan announced in May.
Oil becomes a pillar of Argentina's exports
Thanks to the Vaca Muerta, oil is now Argentina's second-largest export after soybeans, generating nearly 11% of export earnings. This comes as Milei's austerity program squeezes household finances and weighs on sectors such as construction and retail. Estimates suggest the formation will be pumping at least one million barrels of crude oil daily by the end of the decade, with optimistic projections putting that figure as high as 1.5 million barrels.
Source: Oilprice.com
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