Argentina, in a surprising fact, surpassed Colombia and became the fourth largest oil producer in South America. The country is experiencing a once-in-a-generation unconventional hydrocarbons boom, which began when Buenos Aires nationalized integrated energy major YPF in 2012. Since then, Argentina’s oil and natural gas production has continued to rise, periodically hitting new monthly highs as shale oil and gas production volumes grow. It is Argentina’s national oil company, YPF, that is at the forefront of the boom and is responsible for this strong production growth.
By November 2025, Argentina’s crude oil production, despite falling from October 2025’s record of 849,646 barrels per day to 844,386 barrels per day, was still an impressive 12.5% higher than a year earlier. This was the first month in the last six in which production did not reach a new record. Rapidly growing shale oil production at Vaca Muerta is driving surprising production growth in Argentina. By November 2025, shale oil production reached a new monthly record of 578,461 barrels per day, a year-on-year increase of 30.68%, making it responsible for 68.51% of Argentina’s total production.
However, natural gas production continues to decline. Production fell 7% year-over-year to 4.2 billion cubic feet per day, the lowest level since December 2023. This represents a sharp drop from the record 5.7 billion cubic feet per day pumped in July 2025. Rising shale gas production from Vaca Muerta is responsible for the strong growth in Argentina’s natural gas production over the past five years. By November 2025, shale gas production fell 1% year-on-year to 2.7 billion cubic feet per day, which despite being significantly lower than the record 3.8 billion cubic feet per day reported for July 2025, still represented 65% of Argentina’s total gas production.
From July 2025, a combination of well maintenance, lower drilling activity due to weaker spot prices and a lack of infrastructure, particularly storage facilities and pipelines, which is impacting extraction capacity, are weighing on production. In fact, the lack of pipelines and other transportation infrastructure has long been considered a key constraint that could affect production at Vaca Muerta. Although the increasingly prolific formation of shale and the Argentine national oil company YPF will be responsible for further growth in production.
Vaca Muerta, 8.6 million acres, is a massive shale formation, about the size of Switzerland, located in the Neuquén basin in northern Patagonia. It is among the largest unconventional hydrocarbon resources in the world and is often compared to the prolific Eagle Ford and Permian shales. Vaca Muerta is estimated to contain 16 billion barrels of light oil and 308 trillion cubic feet of tight gas, making it the fourth largest unconventional oil reserve and the second largest unconventional gas reserve in the world. According to analysts, features such as greater shale thickness, greater amounts of biological material, higher reservoir pressures and greater well productivity make Vaca Muerta superior to major shale plays in the United States.
After a decade of development, Vaca Muerta is responsible for 69% of Argentina’s oil production and 65% of the country’s natural gas production. With less than a tenth of training in development, tremendous production growth is on the horizon. By the end of the decade, Argentina’s crude oil production is expected to reach at least 1 million barrels per day, with some analysts forecasting 1.5 million barrels per day by 2030. This is a massive increase from the 787,395 barrels per day achieved during the first 11 months of 2025. Natural gas production is expected to exceed 6 billion cubic feet per day by 2030, driven by the increase in Vaca Muerta shale gas. production.
It is the national oil company YPF and its unconventional hydrocarbon acreage in Vaca Muerta that will be responsible for most of Argentina’s hydrocarbon production expansion. The integrated energy major, which was nationalized by President Cristina Fernández de Kirchner in April 2012, owns the largest acreage in Vaca Muerta, controlling 2.9 million gross acres. YPF, after being the first energy company to begin developing conventional energy assets in Vaca Muerta, is the largest producer of shale oil and gas in the formation. This pioneering status is generating a huge windfall for the energy company.
During November 2025, YPF extracted 397,420 barrels of crude oil and 936 million cubic feet of natural gas per day. This represents 47% and 22%, respectively, of Argentina’s total oil and gas production, respectively, making the national oil company the country’s largest hydrocarbon producer. For the same period, YPF extracted 315,937 barrels of shale oil and 725,716 million cubic feet of natural gas per day. This represents 79.5% and 77.5%, respectively, of the energy company’s oil and natural gas production for November 2025.
YPF is focused on developing Vaca Muerta with plans to become a pure-play shale oil and gas producer. The company plans to achieve this by divesting of higher-cost mature conventional oil fields while investing huge amounts of capital to develop its Vaca Muerta acreage. Between 2025 and 2030, YPF plans to invest $36 billion, with annual capital expenditure peaking at $6.8 billion during 2029. This will provide a solid boost to YPF’s reserves and production. At the end of 2024, the energy company had just over one billion barrels of proven reserves, of which 78% or 854 million barrels are unconventional oil located in Vaca Muerta.
YPF’s shale acreage is proving particularly profitable. For the third quarter of 2025, Argentina’s national oil company reported low extraction costs, averaging $8.80 per barrel, with the company only spending $4.60 per barrel to extract oil from its Vaca Muerta area. Those figures underscore how profitable YPF’s upstream shale oil operations are, even in the current difficult operating environment impacted by weaker oil prices. CEO Horacio Marín believes YPF can maintain profitable operations even if prices fall to $40 or $45 per barrel. In an interview with Infobae he stated: “We became resilient at less than 40 dollars a barrel, and at 45 dollars we can develop all of Vaca Muerta.”
YPF will be responsible for causing Argentina’s unconventional oil and gas production to skyrocket. Forecasts vary, but analysts believe the country will produce between 1 million and 1.5 million barrels per day by 2030, while natural gas production is expected to exceed 6 billion cubic feet per day. This will generate a generous economic windfall for Argentina, as the country will emerge as a net energy exporter during 2024, a year in which the economic crisis-stricken country reported its largest energy surplus in almost two decades.
By Matthew Smith for Oilprice.com
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