Daniel Gerold expects a Vaca Muerta production leap in 2027, with crude exports at record highs and the Vaca Muerta Oil Sur (VMOS) pipeline coming on stream.
Sustaining that pace, warned Gerold, director of G&G Energy Consultants, will require recognizing that the most mature shale fields already show signs of interference between wells, and that the real export leap will come from new geological frontiers and large-scale infrastructure projects.
With nearly four decades in the sector, Daniel Gerold brought a comprehensive review of the Vaca Muerta formation, one of the world's largest shale plays, located in Argentina's Neuquén Basin, to the 4th Oil Conference of the Argentine Institute of Oil and Gas (IAPG). His starting point is a curve that has withstood changes of government, regulatory swings and macroeconomic turbulence: Argentina's hydrocarbon production recovered from the pandemic and has more than doubled over the past six years.
Shale Oil Is Growing More Than 20% a Year
One of the central data points of the presentation was the momentum of shale oil, expanding at a year-on-year rate of 22% to 24%. Gerold described an upward curve that accelerated most sharply in the second half: in August and September alone, close to 53,000 barrels per day (bbl/d) were added to national output, which reached 973,700 bbl/d in September, the highest in the series according to Argentina's Secretariat of Energy.
“Of the roughly 135,000 bbl/d of year-on-year growth that production recorded in September compared with the same month last year, almost 100,000 came from two developments: YPF in La Calera and La Angostura Sur, and Pluspetrol in Bajo del Choique after acquiring ExxonMobil's assets,” Gerold said. La Calera is operated by Pluspetrol, with YPF as its partner.
Official records show the scale of those ramp-ups. La Angostura Sur, which YPF, Argentina's state-controlled oil and gas company, develops with a 100% stake, produced 59,012 bbl/d in September, up 89.9% from a year earlier. Bajo del Choique–La Invernada, the block that Pluspetrol, an Argentine independent oil and gas producer, bought from ExxonMobil in late 2024, rose from 13,047 to 46,594 bbl/d between August 2025 and August 2026, and has already secured approval under Argentina's Large Investment Incentive Regime (RIGI) for a $12.4 billion plan.
The acceleration coincides with a sluggish domestic market. Fuel demand at local refineries remains flat and is still below the levels seen before the late-2023 peso devaluation. As a result, the system generates a structural surplus of close to 250,000 bbl/d that goes entirely to export markets.
In October, crude exports reached a preliminary record of 411,000 bbl/d, supported by capacity on the Trasandino pipeline to Chile, shipments from Puerto Rosales, Argentina's primary Atlantic crude export terminal, and inventory drawdowns. With international prices hitting extraordinary peaks during the year, the energy trade surplus over the past 12 months stands at around $12 billion to $13 billion, including a windfall of some $4 billion from global price conditions.
The major logistics milestone that will cement this process is the start-up of the VMOS pipeline and the Punta Colorada export terminal in Río Negro province. “I estimate that crude will start flowing in December to fill the line pack and run tests, and between March and April next year we will see the first tanker load two million barrels,” the consultant forecast.
The 437-kilometer pipeline links Allen, a pipeline hub in Río Negro province, with the province's Atlantic coast. The company building it expects to ramp up to 180,000 bbl/d in the first quarter of 2027, 390,000 bbl/d by mid-year and 550,000 bbl/d by the end of 2027.
New Wells Underperform Earlier Campaigns
Despite the record figures, Gerold offered a technical observation for analysts and investors: future growth in Vaca Muerta will not come from the concessions that currently top the production rankings.
In blocks that have already accumulated between 300 and 700 drilled wells, the industry is starting to run into interference between fractures, the phenomenon known as well interference or “parent-child” wells. Normalized per 1,000 feet of lateral, the most recent campaigns show cumulative production curves noticeably lower than those of earlier years:
- At 9 and 12 months of production, there is a gap of roughly 24,000 fewer cumulative barrels per 1,000 feet of lateral compared with wells from previous campaigns, or about 72,000 barrels for a 3,000-foot type well.
- Wells with four years on production (the 2022 campaign) have cumulative output of around 606,000 barrels, compared with the 847,000 barrels that older wells achieved over the same period.
“Is it bad? No. They are still highly economic wells operated by excellent companies. What I am pointing out is that projecting the basin's future as a simple linear continuation of the past in these mature areas is a mistake. Net growth is going to come from new developments,” he explained.
Among those new frontiers, he cited YPF's progress at La Escalonada and in the southern wet gas play; the Black Oil development that Phoenix Global Resources is driving at Confluencia Norte and Sur, and the arrival of Continental Resources, the U.S. shale company; activity in southern Mendoza province led by Quintana; and the new blocks under way at Rincón de Aranda, Narambuena and Bajo del Choique.
To sustain the pace, the industry has significantly increased its drilling rig count. YPF leads the push: it went from 12 active shale rigs at the start of the year to 18 today, with a target of 22 by February. The broader picture points the same way: according to Tenaris, the Techint Group's steel pipe and oilfield services company, 42 rigs are currently operating in the formation, compared with about 32 a year ago, and the company projects 48 by mid-2027.
Gerold stressed that the market must calibrate maturation times. From the start of drilling a horizontal well to its completion through fracturing and subsequent start of production (flowback), an average of 200 days elapses. For that reason, the jump in the number of connected wells will show up strongly from the first quarter of next year and throughout 2027.
Dry Gas, LNG and Conventional Fields Complete the Long-Term Picture
In gas, the Neuquén Basin, Argentina's main hydrocarbon-producing region, already contributes 60% of national production from unconventional formations. Although gas associated with oil and condensate, at fields such as La Calera, is gaining weight, Gerold defended the strategic need to keep drilling dry gas wells.
The consultant illustrated the marked seasonality of demand: on long weekends with mild temperatures, up to 45 million cubic meters per day (MMm³/d) of unconventional production is shut in for lack of a market. At those same times, the system kept around 20 MMm³/d of dry gas flowing, an indispensable resource for modulating supply and meeting consumption peaks in the winter months.
In liquids and petrochemicals, Gerold reviewed the expansion of the plants of Compañía Mega, the natural gas liquids (NGL) processor owned by YPF, Petrobras and Dow, in Neuquén and Bahía Blanca to process rich gas, which entered the RIGI with a $360 million project, as well as a new $3 billion processing project to separate propane, butane and natural gasoline, with ethane reinjection, which will make it possible to capture international prices that are multiples of domestic market values.
The other new source of demand is liquefied natural gas (LNG). The pipeline being built to the Golfo San Matías, in Río Negro province, is set to supply the first liquefaction vessel, the Hilli Episeyo floating LNG unit (FLNG), from the southern-hemisphere winter of 2028, with a second vessel, the MKII, joining at the end of that year to create continuous demand of 27 MMm³/d and steady LNG exports by 2029. Before the dedicated pipeline is in place, the Hilli of Southern Energy, the consortium formed by Pan American Energy (PAE), YPF, Pampa Energía, Harbour Energy and Golar LNG, is scheduled to start operating in 2027 using available capacity on the existing network, and Shale24 has already detailed the work the project must complete before exporting.
The counterpoint to Vaca Muerta is the structural decline of mature conventional fields. The San Jorge Gulf Basin raises the biggest alarms, with year-on-year declines of up to 10% in some months, without any weather contingencies or operational disputes to explain them. For Gerold, the key will be assessing whether the learning curve of Neuquén shale can be shortened and replicated in the D-129 formation and in northern Santa Cruz province, at Palermo Aike. In the D-129, Pan American Energy has been producing shale gas for more than 18 months from a horizontal well with a 1,500-meter lateral.
In the far south, the Austral Basin managed to stabilize its volumes thanks to the start-up of the offshore Fénix project and its condensate contribution. The platform lies 60 kilometers off the coast of Tierra del Fuego, began producing in September 2024 and belongs to the concession operated by TotalEnergies, the French energy major, with 37.5%, alongside Harbour Energy, the U.K.-based E&P company (37.5%), and PAE (25%).
Toward the close, Gerold turned to the macroeconomic and political debate over the foreign currency that energy will generate. He described as “pointless” the contest among political leaders who celebrate future surpluses of $20 billion or $30 billion:
“All the economists and politicians talk about how many dollars are going to come into the country. But those dollars don't belong to the country: they belong to the companies. And that is how it should be. The RIGI establishes that foreign currency must be available to companies to reinvest in projects that demand billions of dollars of capital-intensive investment. It is a mistake to believe that the energy sector came to magically solve Argentina's fiscal imbalances.”
He also warned about the cost of financing that local operators pay today, with bond yields of around 9% a year because of country risk, and about the extreme volatility of international prices. “Futures curves for the end of the decade show crude at around $65 or less. Decision-making in this industry requires absolute respect for capital risk,” he stressed.
His conclusion is that Argentina has changed structurally. “We are going to be a net energy exporter. If we add mining and LNG to Vaca Muerta over the next decade, the long-term outlook is truly fantastic.”