Exclusive-Chevron uses Permian playbook to breathe life into Argentina’s ‘Dead Cow’ oil region

In a remote oilfield in Argentina, Chevron is utilizing US workers, equipment, and expertise to bring life to the once-inactive Vaca Muerta formation, a shale basin considered a "dead cow" until now. The company aims to triple its production in Argentina, starting with a shift from one to three drilling rigs at its El Trapial block by early 2029.

Vaca Muerta, a world's largest shale basin, has never reached its full potential due to Argentina's volatile economy, which has experienced bouts of protectionism, sovereign debt defaults, hyperinflation, and capital controls. However, with President Javier Milei's reform-driven economic policies, the country is projected to become the third-largest liquids producer in South America by 2028, with an average of 910,000 barrels of oil equivalent per day (boepd) this year, a 42% increase from 2023.

Chevron's long-standing history in Argentina and its stake in the upcoming Vaca Muerta Oil Sur export pipeline demonstrate confidence in the country's oil sector. The company's partnership and working approach in Vaca Muerta is crucial to its development. Chevron is investing $13.8 billion over 30 years to increase production at the block, which could accelerate if it adds a second drilling rig in June 2024 and a third around early 2029.

The remote location of El Trapial, where Chevron is operating, requires a 45-minute chartered flight from Neuquen. To address the challenges of developing the field, Chevron is replacing older housing units with redesigned buildings and constructing a new dining hall featuring beef dishes and a soccer field. Despite the hurdles, Chevron remains optimistic about the field's potential, believing that a continuous drilling and fracking schedule, similar to the success in the US Permian Basin, will significantly improve production rates.