Argentina's Vaca Muerta shale oil production is expected to surge 30% this year as a major pipeline expansion nears completion, experts said. 

Oleoductos del Valle (Oldelval) is more than doubling the capacity of its pipeline system to 540,000 barrels per day, with an additional 315,000 barrels per day largely earmarked for export via the Puerto Rosales terminal in Bahía Blanca, Buenos Aires province.

“When the expansion is enabled, that’s when the race will begin among companies to fill this capacity as soon as possible,” said Ernesto Díaz, senior vice president at Rystad Energy, during an energy webinar hosted by Econojournal.

Díaz said this competition will prompt companies to increase drilling, contract more rigs, hire workers, and expand production, including into new fields. He noted that the number of new wells connected in Vaca Muerta hit a record 46 in December, up from 10 wells per month before 2020.

Nicolás Arceo, director of the consulting firm Economía y Energía, said at the event that the play saw 20 wells connected per month in 2023 and 26 in 2024.

According to data compiled by Aleph Energy, this increased activity pushed production in Vaca Muerta up 28% to 448,000 barrels per day in January from the year-earlier month. This helped offset a 6% decline in conventional output, leading to a 12% increase in Argentina’s overall crude production to 745,000 barrels per day.

While Oldelval’s expansion is driving growth, experts say additional takeaway capacity will be needed. Arceo predicted that the new capacity will be saturated by late 2026 or mid-2027.