Argentina\u2019s Vaca Muerta is booming as the key shale province outside the United States has seen record oil and near-record natural gas production in recent months.<\/p>\n
Vaca Muerta\u2019s fortunes, however, appear to be confined so far to the area in which the shale patch is located, the province of Neuqu\u00e9n in the western region of Patagonia.<\/p>\n
The rest of Argentina continues to struggle with sluggish growth, high inflation, weak consumer spending, and business and mortgage defaults, all the while South America\u2019s second-largest economy continues to pay off its large external debts and loans it had taken on through the years.<\/p>\n
Vaca Muerta\u2019s success has boosted Argentina\u2019s energy industry, which has joined agriculture as a key driver of GDP growth. But outside the shale patch, total public consumption and investments have declined year to date, and consumer spending has dropped, too.<\/p>\n
Argentina\u2019s President Javier Milei and his government expect the rest of the country to catch up with the Vaca Muerta boom, but little progress has been made so far. Job creation and growth remain a tale of two Argentinas.Related: US Oil Drillers Turn Cautious as WTI Holds Near $85 per Barrel<\/a><\/strong><\/p>\n What was a predominantly U.S. business until a few years ago, shale exploration and production is now gaining momentum outside North America. And Argentina\u2019s Vaca Muerta is top of the list of oil and gas companies, including U.S. shale giants, as a de-risked basin with proven geology that\u2019s far away from having to rely on the Strait of Hormuz or any other corridor in the Middle East to ship barrels out.<\/p>\n After a slow start earlier this decade, Vaca Muerta is now booming. The latest production figures showed that crude oil output hit an\u00a0all-time high<\/a>\u00a0of 887,227 barrels per day (bpd) in May, up by 19% from a year earlier. Natural gas output also rose to 5.5 billion cubic feet per day, which was just shy of the record 5.7 billion cubic feet daily reported for July 2025. Natural gas production rose by 5.4% in May 2026 from April and 11% from a year earlier.<\/p>\n Vaca Muerta has already made Argentina\u00a0the fourth-largest<\/a>\u00a0oil producer in Latin America\u2014a position that may improve in the future as the government prioritizes the development of the local energy industry, encouraging infrastructure projects aiming to boost the offtake capacity of the Vaca Muerta.<\/p>\n The shale patch has turned Neuqu\u00e9n into a kind of Texas, workers who moved to the province to work for the highest private-sector salary in the country have told\u00a0Reuters reporter Leila Miller<\/a>.<\/p>\n Outside the shale patch, it\u2019s the same old Argentina.<\/p>\n The average monthly salary in the oil and gas sector in Neuqu\u00e9n is about $5,600, three times higher than the average $1,800 salary in the capital city Buenos Aires.<\/p>\n \u201cToday we have two Argentinas, one Argentina that grows and another that falls,\u201d Guido Zack, an economist at the Fundar think-tank in Buenos Aires, told Reuters.<\/p>\n The government bets on Vaca Muerta and mining to prop up the overall economy, but companies are folding, and\u00a0jobs are being lost<\/a>\u00a0outside the shale patch, amid weak demand, falling investments, and rising competition in manufacturing due to Milei\u2019s import liberalization policies.<\/p>\n Argentina\u2019s government hopes the shale boom would trickle down into the overall economy. But this will be a challenge, analysts say.<\/p>\n