Argentina's oil production expected to rise almost 16% on year in 2025: CEPH

Argentina's oil production is expected to increase 15.8% to 830,000 b/d in 2025 from 717,000 b/d in 2024, Argentina's Chamber of Hydrocarbons Exploration and Production, or CEPH, said April 4.

The increase would bring output close to the all-time record of 847,000 b/d reached in 1998, the industry group said.

The growth is led by increased activity and the construction of new takeaway capacity in Vaca Muerta, a huge shale play in southern Patagonia, the industry group said.

Oleoductos del Valle, the company that operates the pipelines for moving crude out of Vaca Muerta, launched operations of an additional 315,000 b/d of transport capacity on April 4, all of which will be for export from Vaca Muerta.

This expansion of takeaway capacity is a "key driver of the current hydrocarbon boom," as it "facilitates the flow of resources to consumption centers and the international market," the industry group said.

At the same time, rising local crude prices are encouraging new investment.

The Javier Milei government, which took power at the end of 2023, removed the price caps put in place by the previous administration, a move that has encouraged investment in boosting oil and natural gas output and an increase in exports.

"The positive trend in production and foreign sales, primarily of oil, is driven by the convergence of the local and international prices of crude oil," the chamber said. "This alignment between domestic and foreign prices drastically reduces investment uncertainty, boosts the sustainability of the entire value chain and contributes to the country's integration with global markets."

The industry group said government promises of a stronger currency and capital controls by the end of this year will further spur investment.

These controls, in place since 2019, limit access to US dollars to use for paying dividends or financing in foreign currencies.

"The end of foreign exchange restrictions will help make Argentina a reliable supplier of gas and oil to the world," the group said.

The group said it expects the energy trade surplus to reach $7.5 billion in 2025 after rising to $1.32 billion in the first quarter, 35% higher than in the first quarter of 2024.