YPF SA, Argentina’s state-owned energy company, has announced plans to invest $3.3 billion in the Vaca Muerta formation throughout 2025. The company will concentrate exclusively on oil wells, emphasizing the country’s most lucrative upstream segment.
This investment is part of a broader strategy that aligns with ongoing infrastructure enhancements aimed at increasing the capacity for crude evacuation from the Neuquén Basin. Notably, the Vaca Muerta investment will make up two-thirds of YPF’s total $5 billion in capital expenditure for the year. Rather than drilling new gas wells, YPF plans to focus on completing and connecting its existing stock of drilled, but uncompleted wells.
Logistically, YPF is preparing to increase its crude transportation capacity by 23,000 barrels per day (b/d) starting in April. This will be achieved once the expansion of the Oldelval pipeline system, which is in the final stages of line-fill, is completed. Additionally, the company is investing in the next phase of expansion, known as Duplicar X, a 300-km pipeline extension between Allen and Puerto Rosales. This project will include new pumping stations and will serve both Trafigura’s refinery and Oiltanking’s export terminal.
Currently, YPF produces 280,000 b/d of crude, with around 160,000 b/d (or 60%) coming from the Neuquén Basin. The company aims to boost this output to 200,000 b/d from Vaca Muerta by the end of the year. As Argentina’s top crude exporter, YPF ships 41,000 b/d to Chile, while 100,000 b/d is transported via Oldelval to the La Plata refinery, with the rest going to the Luján de Cuyo plant.
Looking ahead, YPF plans to invest $1 billion in upgrading both refineries to lower sulfur content in gasoline and diesel. Furthermore, the ongoing development of the Vaca Muerta Oil Sur pipeline is expected to add 48,600 b/d of export capacity by late 2026. YPF holds a 27% stake in this pipeline, which is expected to initially carry up to 180,000 b/d.
With long-term goals to transition to 100% unconventional production by 2026, the broader industry expects Vaca Muerta’s output to reach 1.5 million b/d by 2030, with up to 1 million b/d earmarked for export.