Argentina Reaches Deal to Tap into Massive Vaca Muerta Oil and Gas

unconventional oil and gas in Vaca Muerta
Macri said the potential for new energy in the area could satisfy the country’s needs as well as the world’s. (Clarín)

EspañolArgentina President Mauricio Macri announced a plan Tuesday to increase use of unconventional oil and gas in Vaca Muerta area located in the Neuquén Basin in the south of the country.

Companies have committed to investing US $5 billion during the first year of the project, which should also lead to a sharp change in the working conditions for oil workers.

“Today sets the stage for the future of the energy of our country,” President Macri said.

He stressed that the agreement reached by the government, provinces, oil companies and workers in the sector involves the “beginning of a stage of development of unconventional energy.”

“The world needs energy and the good thing is that Argentina has the possibility of not only supplying its own needs but that of the whole world, because we have much to contribute in renewable energy,” he said.

Macri stressed that Vaca Muerta never achieved its full potential, and that it is difficult to figure out why previous administrations never made it happen. Companies are committed to investing US $5 billion for this first year alone, and then have to double it in the years to come if they decide to stay with the project.

The objective of the projects is reportedly to reduce the average cost of the extraction of non-conventional gas, which was US $14 million — very high when compared to the United States’ $7 million, according to oil company officials.


The agreement with oil workers reportedly implies drastic changes in working conditions for unconventional areas in the province of Neuquén, in particular those of Vaca Muerta.

Adjustment to working hours and the number of workers per project are among some of the preliminary changes to labor conditions that have thus far been reported.

An eight-hour work day may be established for operation and maintenance Monday through Friday, as opposed to the current schedule that offers double salary for weekends and holidays. The incorporation of night work involving assembly and  is intended to avoid downtime, according to Ámbito Financiero.

Macri said the development of Vaca Muerta will encourage “a nationwide employment revolution” inciting “thousands of families” to move to the province of Neuquen, where the industry will experience “triple or quintuple the activity.”

Macri reportedly praised trade unionists in the sector, as they were the ones who worked hard to close the deal.

Companies are reportedly committed to keeping jobs and taking on new employees as productivity increases. The state and provincial governments will reportedly do the same by cutting some taxes in the sector.

The president also confirmed that withholdings on the export of oil and oil products will soon be coming to an end after 15 years. Oil companies were reportedly informed that no more export tariffs would be applied at customs.

Source: Ámbito, Clarín, Infobae.

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