Neuquén province recorded 601,273 barrels daily in December, exceeding November’s 590,339 barrels and establishing a new provincial high. The province now generates approximately 70% of Argentina’s total oil production, with Vaca Muerta’s unconventional resources driving the expansion. Unconventional oil production is forecast to increase 28% in 2026, while conventional output faces a projected 4% decline compared to 2025 levels.
The shift toward unconventional resources has accelerated dramatically since fracking operations began in Vaca Muerta in 2014. Unconventional production represented less than 5% of national output in 2015 and under 25% in 2020, compared to nearly 70% currently. Conventional production is expected to fall 41% from 2016 levels and 57% from 2006 volumes, demonstrating the ongoing structural transition in Argentina’s oil sector.
Natural gas production presents a contrasting picture, with first-quarter 2026 volumes running 1% below 2025 despite marking the second-highest quarterly output in 17 years. Unconventional gas, comprising 65% of national production, grew 4.8% year-over-year in the opening quarter. However, a nearly 10% drop in conventional gas extraction offset these gains. Full-year 2026 gas production is projected to decline marginally, less than 1% from 2025 levels, though still representing the second-highest annual output in two decades.
December gas production in Neuquén averaged 90.8 million cubic meters daily, up from November’s 81.2 million cubic meters but well below the May-September peak period. Infrastructure expansion, particularly new pipeline capacity, supports growing upstream activity in the Neuquén Basin, though gas production remains constrained by domestic demand cycles and limited export infrastructure compared to oil evacuation capacity.
This article was curated and published as part of our South American energy market coverage.
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