Vista Energy SAB de CV, a leading Mexican oil firm, has announced a healthy increase in its investment plans for the Vaca Muerta shale formation in Argentina, underscoring its commitment to bolstering oil production and reserves in one of the world’s most promising shale reserves. The Mexican firm, standing as the second-largest shale oil producer in Argentina behind the state-owned YPF, has committed to a 60% increase in its planned investment in Vaca Muerta, totaling $2.5 billion through 2026.
Vaca Muerta, known as the second-largest shale gas reserve and the fourth-largest shale oil reserve globally, has been a beacon of hope for Argentina. It represented almost half of the country’s oil production and 70% of its crude oil exports in the first half of 2023. The region is pivotal for Argentina’s strategy to boost domestic production and reduce its reliance on costly energy imports. Vista’s CEO, Miguel Galuccio, emphasized the potential of Vaca Muerta to generate significant additional exports, potentially creating a virtuous cycle of foreign currency revenue and investments to drive the country’s economic and social growth.
The ambitious plan by Vista includes increasing its daily production to 100,000 barrels by 2026, a significant rise from the previous forecast of 80,000 barrels a day. This increase in production is supported by the development of 138 new shale wells, a 33% jump from earlier estimates. Furthermore, the company anticipates a reduction in the cost of extraction to $4 a barrel by 2026, down from the current $5.50 a barrel, as operational efficiency improves.
This expansion in Vaca Muerta is not only expected to nearly double Vista’s revenue from 2023 to 2026, reaching $2.35 billion, but also to significantly enhance the company’s operational footprint in Argentina. Vista has also projected a substantial increase in its proven reserves at the Vaca Muerta formation, with a 27% increase in 2023, underscoring the site’s rich potential for oil and gas production.
The partnership between Vista and Trafigura Argentina further strengthens the investment in Vaca Muerta, with plans to develop three pads or oil well zones on Vista’s Bajada del Palo Oeste concession. This collaboration is part of a broader strategy to tap into the vast resources of Vaca Muerta and marks a significant commitment to Argentina’s energy sector.
Vista’s increased investment and production outlook for Vaca Muerta comes at a critical time for Argentina, offering a pathway to energy self-sufficiency and economic stability. The development of Vaca Muerta is a key element in Argentina’s ambition to become an energy powerhouse, and Vista’s expanded role in this endeavor highlights the international confidence in the country’s shale reserves. As Vista gears up for this significant investment, the global energy sector watches closely, recognizing Vaca Muerta’s potential to reshape the dynamics of international oil and gas markets.
