Energy giant Shell is exploring the market for a potential sale of its stakes in Argentina's Vaca Muerta shale formation. The company holds majority stakes in four key blocks, and its production in 2024 amounted to 15.6 million barrels of oil.
Energy giant Shell has begun exploring the market for a potential sale of its stakes in Argentina's Vaca Muerta shale formation. Such a move by one of the pioneers of the region's development came as a surprise to the industry amid a general increase in production in the Neuquén basin and the active development of oil export infrastructure. This was reported by Reuters, writes UNN.
Details
According to sources in the oil sector, Shell has already approached potential buyers to assess their interest in a package of shares, the value of which could be measured in billions of dollars. The company holds majority stakes in four key license blocks and minority stakes in three others, which are being developed jointly with state-owned YPF.
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In 2024, Shell's production in this region reached a record 15.6 million barrels of oil, making these assets among the most attractive in the Latin American shale hydrocarbon market.
Why investors are concerned about a possible exit
Vaca Muerta is often called "Argentina's Permian" due to its enormous reserves (second largest in the world for gas and fourth for oil). Shell's exit could indicate a change in the company's strategy after its recent abandonment of the Argentina LNG project. Experts suggest that despite the high productivity of the wells, Shell may be reviewing its portfolio in favor of less risky or more profitable assets in the US. At the same time, the sale is not yet guaranteed – the company continues to finalize legal procedures within the framework of the joint construction of the Vaca Muerta Sur oil pipeline, the launch of which is scheduled for the end of 2026.
The future of "Dead Cow" without Shell
If the sale goes through, it will open the door for new players, such as the American Continental Resources, which recently acquired minority stakes in the region. Currently, Vaca Muerta is in the process of transitioning from exploration to mass execution of works: the number of hydraulic fracturing stages in 2026 is expected to increase by 22%, reaching 28,000 stages. Javier Milei's government actively supports the industry through the "RIGI" tax incentive system, trying to maintain the interest of large international corporations amid high domestic inflation and unstable Brent prices.
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