Six years ago Miguel Galuccio first brought Chevron to Argentina’s Vaca Muerta, or “Dead Cow”, rock formation. Now, as chief executive of independent producer Vista Oil & Gas, the 51-year-old is blazing a trail for rivals and still pushing Argentina to replicate the success of the US shale boom.
Vista last month raised $100m on the New York Stock Exchange, weeks after becoming the first company to export shale oil from Vaca Muerta, billed as the most promising shale oil and gas basin outside the US.
“Investors move in packs, and packs always have a leader,” said the petroleum engineer who used to run state- controlled energy company YPF.
“We are leading the way [for Argentina] to tap into a new kind of money which was really what created the shale boom in the US,” he added, referring to the key role of independent companies. Moreover, Argentina has the advantage of “permanently benefiting from lessons learnt in the US”.
Argentina has a long way to go before reaching US levels of crude oil production, which recently hit 12m barrels per day having more than doubled in the past decade. However, with about 2bn barrels of oil reserves — and some 27bn barrels of potential resources in Vaca Muerta — and confidence that Argentina’s shale fields are comparable to formations such as Eagle Ford or Bakken in the US, the government aims to double oil production from 500,000 to 1m bpd and natural gas from 1.4tn cubic ft to 3.5 tcf by 2023.
“There is a stealth productivity revolution taking hold in Vaca Muerta that could set the course for a major burst in hydrocarbon production in the next five years,” said Walter Stoeppelwerth, the chief investment officer at Portfolio Personal Inversions in Buenos Aires. He added that this could “revolutionise Argentina’s debt dynamics, balance of payments and fiscal performance”.
