Key facts
- Chevron plans to invest $13.8 billion over 30 years in Argentina's Vaca Muerta formation.
- The company aims to triple production at its El Trapial block by 2035, potentially accelerating the timeline.
- Argentina's oil output is projected to increase by 42% in 2024 compared to 2023.
- Developing Vaca Muerta wells costs about 30% more than in the Permian Basin.
Chevron is deploying US workers, equipment, and expertise in Argentina's Vaca Muerta oilfield, aiming to replicate the success of the Permian Basin shale boom. The company plans to triple its production in Argentina, with a goal of increasing its drilling rigs at the El Trapial block from one to three by early 2029. Chevron is seeking government approval for a 30-year, $13.8 billion investment plan to boost output.
Vaca Muerta, one of the world's largest shale basins, has historically struggled to reach its potential due to Argentina's economic volatility, including protectionism, debt defaults, hyperinflation, and capital controls. However, President Javier Milei's reforms are credited with accelerating an oil boom, positioning Argentina to become South America's third-largest liquids producer by 2028.
Despite favorable government policies, producers face higher costs and a less-developed supply chain compared to the Permian. Chevron's long-standing presence in Argentina and its stake in the Vaca Muerta Oil Sur export pipeline signal confidence in the sector's growth. The company is also focused on extending its contract for El Trapial's western section beyond its 2032 expiration and building new facilities.