The US$45bn Vaca Muerta Rigi landscape

Argentina's Rigi investment incentive regime is experiencing an uptick in the number of Vaca Muerta oil production projects seeking – or expected to seek – incorporation.

Around US$45bn in projects has confirmed applications for the benefits in recent weeks and months.

Argentina's biggest hydrocarbons producer, state-controlled YPF, leads the pack after revealing it had submitted a US$25bn Rigi application.

Vaca Muerta newcomer GeoPark also recently submitted documentation for a US$1bn application.

Stars have aligned for oil and gas companies thanks to both domestic and external factors.

Officials widened the scope of Rigi to incorporate onshore upstream oil, among other changes. While the turmoil in the Middle East is generating fallout around the world, the uptick in prices and the prospect of importing nations looking to Argentina for future supply constitute a boon for oil companies in the country.

Juan José Carbajales, former federal hydrocarbons chief and current head of consultancy Paspartú, told BNamericas that the Rigi rule change provided a tailwind for projects already in the pipeline, given they are profitable, export-oriented and linked to midstream projects already incorporated into Rigi.

Under Rigi, export taxes are eliminated and capital controls on export earnings are eased after the third year, among other incentives. Minimun investment for oil and gas production projects is US$600mn.

Super Rigi

The government is expected to seek congressional approval for the proposed "Super Rigi."

The planned beefed-up regime, rating agency Moody's wrote in a report, "would be credit positive for corporations in energy, mining, hydrocarbons and infrastructure because it aims to expand Rigi benefits, potentially broadening sector eligibility to include technology-intensive projects and stronger incentives for large, long-cycle investments."

Political risk angle

Boosting the flow of foreign investment and creating quality jobs – that is, demonstrating to the electorate that his policy push is bearing real fruit – appears vital to bolstering incumbent President Javier Milei's chances of being reelected next year.

Indeed, Milei is facing headwinds. Economic indicators have deteriorated amid a weakening of sectors that generate the most jobs, such as manufacturing and retail.

Evaluation-phase Rigi projects

Information on projects submitted or under evaluation by authorities can be limited, with confirmation coming either from the companies themselves or government officials.

Once projects have been approved, a formal notice is published in the official gazette.

Here BNamericas looks at some projects that are either under evaluation or earmarked for potential inclusion.

Companies have filed single Rigi applications incorporating both upstream and midstream/processing components. Targeted production from projects currently under evaluation exceeds 470,000b/d, which would increase national headline oil production – today standing at almost 900,000b/d – by around half.

Vaca Muerta oil production, today standing at around 600,000b/d is expected to reach the 1Mb/d mark by the end of the decade.

Associated midstream projects include Oldelval's Duplicar Norte and the YPF-led Vaca Muerta Sur pipeline and terminal, both in the construction phase.

As things stand, companies have until July 2027 to present applications.

YPF

YPF has filed a Rigi application for a US$25bn project, the biggest submitted to authorities to date.

The work involves drilling more than 1,100 wells to reach a production plateau of 240,000b/d from 2032, with all output destined for the export market. Associated natural gas will supply the local market.

The project, branded LLL Oil, targets the La Angostura Norte, La Angostura Suroeste, Barreal Grande, La Angostura Sur II and La Angostura Sur I areas.

The areas will share surface facilities, drilling rigs, fracturing sets and logistics associated with the supply of sand and water, YPF said in a statement.

The company had previously indicated the application would target its so-called southern hub.

Tecpetrol

Looking to expand its oil footprint, gas heavyweight Tecpetrol has sought Rigi benefits for its construction-phase Los Toldos II Este project. Estimated investment totals US$2.4bn through 2028. A 2027 production target is 70,000b/d.

Pluspetrol

Pluspetrol has filed a US$12bn Rigi application for the Bajo del Choique-La Invernada project. Pluspetrol aims to eventually reach production of around 100,000b/d at the acreage.

Pampa Energía

Like Tecpetrol, Pampa Energía is a major gas producer seeking a share of the oil export market.

Pampa Energía has sought benefits for its flagship oil project, Rincón de Aranda. Associated investment is US$4.5bn and output is expected to plateau at 45,000b/d next year.

GeoPark

In partnership with Neuquén province state-owned oil and gas company GyP, Colombia-headquartered GeoPark filed a US$1bn Rigi application.

The project targets GeoPark areas Loma Jarillosa Este and Puesto Silva Oeste, with the objective of raising production to 20,000b/d over the next three years.

Some other companies and projects to watch

Argentina's biggest electricity generator by installed capacity, Central Puerto, has acquired Vaca Muerta blocks. The company is working with a US shale veteran on de-risking work. Central Puerto said that, depending on the outcome, a Rigi application may be considered. The acquisition of the Aguada del Chivato and Aguada de Bocarey blocks constitutes Central Puerto's entrance into the oil and gas sector.

Vista Energy, the second-biggest shale oil producer, has previously said Rigi applications could be filed for operated development blocks Bandurria Norte and Águila Mora and "eventually" Bajo del Toro, which is operated by YPF. YPF has said associated talks were underway.

Neuquén recently authorized the awarding of three nonconventional extraction licenses to Vaca Muerta newcomer TanGo Energy. Given Vista Energy is a stakeholder, TanGo could potentially tap the regime.

US shale player Continental Resources has also established a foothold in Vaca Muerta. Among other assets, Continental has acquired a 90% stake in the Los Toldos II Oeste block from Pluspetrol.

(The original version of this content was written in English)