The long decline in the production of hydrocarbons in Argentina continues. Last year, oil and gas producion fell again after a recovery in 2016. However, beyond these figures, signs are beginning to appear that presage a change in trend, at least in natural gas.

Vaca Muerta, one of the largest shale prospects in the world, is shifting from pilot projects to production. Subsidized wellhead prices, a productivity agreement reached between the state and the unions, coupled with the reduction of costs as companies advance in the learning curve, are factors that will drive new investment in shale gas during the next few years.

In oil, however, with a price scenario that, according to most projections, will be located in the US$50-60 range this year, things might move slowly. But the consensus is that total production of oil could have touched a floor in 2017 to enter, at least, a plateau during the next three years. In the medium term, analysts predict that as companies gain efficiencies in shale gas, they will be transferred to shale oil in a second stage.

In this report we describe the recent past in the production of hydrocarbons in Argentina, and looks at what's next. In addition, we will identify the opportunities and barriers that the country has before it to develop its unconventional resources. Finally, we explore offshore and what the government is doing to promote it.

Figure: Monthly Oil Production


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