Analyzing a country’s energy mix is essential to understanding its economic development. This is especially true for countries that are not self-sufficient in energy, as in Argentina’s case. This problem is all the more apparent in the current international context, in which the increase in hydrocarbon prices will cause a significant decline in Argentina’s balance of trade for the sector this year.
This study analyzes how Argentina’s hydrocarbon sector has evolved in recent decades. It explores the obstacles the sector faced during the process of consolidating a sustained growth strategy and analyzes its potential, particularly in terms of the nonconventional energy resources available in the country.
The first section of the study analyzes Argentina’s hydrocarbon sector in the context of the energy transition that has begun internationally. The second section traces the development of Argentina’s hydrocarbon sector following the privatization of state oil company YPF in 1992, including landmark moments such as its renationalization in 2012. The last section discusses the sector today and in the recent past before focusing on the future and the substantial opportunity that the nonconventional resources at Vaca Muerta constitute.
By drawing on the nonconventional resources of the Neuquén basin, Argentina could potentially meet its demand for oil for almost a century and its demand for natural gas for twice that time. This implies being able to develop a new export platform for hydrocarbon resources in the coming decades. No other sector in the Argentinian economy has the potential to increase its exports as much as the hydrocarbon sector.
In short, this paper aims to draw on historical evidence to identify how Argentina’s regulatory framework needs to be modified to make the most of the historical window of opportunity that nonconventional resources represent. Developing these resources would imply a major contribution to the process of overcoming the external restrictions that the Argentinian economy has faced in recent decades and to financing the energy transition that the country must necessarily undertake over the 21st century.
This study is the first in a series entitled Opportunities for Argentina’s Energy Matrix. The second paper will focus on the electricity sector.
