Vaca Muerta in 2040: Why This Year Could Be Key for Argentina

Vaca Muerta is gaining importance on the global energy map at a time when major oil companies face a long-term concern: how to sustain their production in the coming decades. A report warned that up to 80% of the leading companies in the sector could experience significant declines by 2040, in a context of lower exploratory investment, stronger-than-expected demand for hydrocarbons, and geopolitical tensions that once again put supply security at the forefront.

The study, prepared by the Boston Consulting Group (BCG) and its Center for Energy Impact, projects that most major companies will face production declines of between 20% and 50%, while a smaller group could suffer declines exceeding 60%. In this scenario, assets capable of producing for many years gain strategic value.

For Argentina, the diagnosis comes at a crucial moment. Vaca Muerta consolidates its role as a driver of local energy growth, concentrates investments in unconventional oil and gas, and emerges as one of the basins with the greatest potential to increase production and supply international markets.

Why Oil Companies Are Looking at Long-Term Reserves Again

The BCG report suggests that the oil industry is entering a new phase marked by three main factors. The first is a decade of lower reinvestment in exploration and production, resulting from greater discipline in capital allocation. The second is a demand for oil and gas that is more persistent than projected in energy transition scenarios. The third is a more uncertain geopolitical context, with conflicts such as those in the Middle East raising risks regarding global supply.

In this framework, the longevity of portfolios becomes a priority again. Companies need to replace the production they lose due to the natural decline of their existing assets while simultaneously avoiding investments that are not competitive in costs or recovery timelines.
Vaca Muerta, present and future for Argentina.
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"After a decade marked by greater discipline in capital allocation, the longevity of portfolios becomes a strategic priority again," said Leonardo De Lella, Managing Director & Partner at BCG.

According to the executive, the sector needs to resume selective investments to replace the production lost as existing assets decline. For Argentina, this challenge coincides with the opportunity to consolidate Vaca Muerta as a globally scalable resource.

Vaca Muerta, Better Positioned to Attract Capital

BCG emphasized that the availability of resources alone does not guarantee a competitive advantage. To transform resources into profitable production, companies and countries must sustain investments, incorporate technology, improve costs, and develop infrastructure.

This point is central to Vaca Muerta. The formation has abundant resources and has already shown productivity improvements in recent years, but its large-scale development depends on the ability to execute transportation, evacuation, processing, and export projects.

The report states that a growing part of future supply will come from already discovered fields and projects currently under development, rather than from new exploratory findings. This characteristic favors basins with known resources, expanding value chains, and the capacity to scale production, as is the case with the Neuquén formation.

For the international market, Vaca Muerta combines two relevant attributes: resource volume and growth potential. In a world where many oil companies will face decline, basins capable of adding production become increasingly important within global strategies.

Technology, Recovery, and Efficiency
Technology appears as another key variable to define which assets will be competitive in the future. According to BCG, companies with differential technical capabilities will be able to extend the lifespan of their assets, increase the recovery of existing resources, and access reserves that are currently out of reach.

In shale, the consultancy noted that enhanced recovery technologies could significantly raise recovery factors, although many of these solutions are still under development.

For Vaca Muerta, this point will be decisive. Competitiveness will not only depend on drilling more wells but also on improving productivity, reducing costs, optimizing completions, applying operational intelligence, and maintaining technical standards that allow competition with other unconventional basins worldwide.

Knowledge of the subsurface, execution capacity, and innovation can also become advantages to attract partnerships, financing, and new operators.

Global Competition for Oil and Gas
The report also warns that access to resources will become increasingly competitive. According to BCG, 45% of the net present value of liquid resources still available in the world is found in markets controlled by states or with restricted access. In natural gas, this proportion reaches 35% of projected cumulative production.

This scenario will force governments to offer stable regulatory frameworks, clear rules, and alignment of interests to attract partners with technical and financial capacity.

"The ability to develop competitive long-term portfolios will again be a key factor to differentiate companies in the sector," added De Lella.

For Argentina, the message is to maintain conditions that allow transforming Vaca Muerta's potential into exportable production. The resource exists, but global competition for capital will be more demanding and will reward countries that offer predictability, infrastructure, and execution capacity.

The Argentine Challenge: Turning Resources into Exports
The potential of Vaca Muerta is reinforced by the international context, but the opportunity is not guaranteed. Argentina needs to sustain investments, expand infrastructure, and consolidate long-term rules to take advantage of the new cycle.

The BCG report places the Neuquén basin in a favorable position against the expected decline of many major oil companies. However, it also makes it clear that the availability of resources is not sufficient.

The next stage will depend on the ability to convert those resources into competitive and sustainable production at scale. Key factors will include transportation infrastructure, export projects, access to financing, technological efficiency, and regulatory stability.

Vaca Muerta is already the main growth engine of the Argentine hydrocarbon sector. Now, in a world where major oil companies are concerned about the depletion of their portfolios, the Neuquén formation could gain a more significant place in the global oil and gas supply.