After nearly a decade of absence, Petrobras, the Brazilian state-owned oil company, is considering a strategic return to Argentina. This decision follows a series of recent events, including the signing of a memorandum of understanding between the two countries aimed at strengthening gas trade. The Vaca Muerta deposit, one of the largest shale basins in the world, presents itself as a key asset in this dynamic.
On November 18, a memorandum of understanding (MOU) was signed between Argentina and Brazil to gradually increase exports of Argentine natural gas to Brazil, reaching 30 million cubic meters per day (m³/d) of here 2030. The first deliveries would begin in 2025 with 2 million m³/d. This volume would transit via existing infrastructure or new pipelines, with options passing through Bolivia, Paraguay or Uruguay.
A strategic partnership with YPF
As part of this return, Petrobras is already collaborating with YPF, the Argentine oil company, to explore joint opportunities in the Neuquén basin, where Vaca Muerta is located. In September, the two companies signed a protocol to evaluate projects over three years, with an initial focus on the Río Neuquén field. This site, operated by YPF with Petrobras as a partner, currently produces 5.2 million m³/d of gas and 2,100 barrels of oil per day.
This collaboration marks a turning point for Petrobras, which sold most of its assets in Argentina in 2015-2016 to focus on its domestic market. At the time, the decline in Argentine energy production had motivated this withdrawal. Since then, the development of Vaca Muerta has allowed the country to regain a position of strength, with oil and gas production significantly increasing.
A favorable regional context
The rise of Vaca Muerta coincides with a growing need in Brazil to diversify its energy supply sources. Long dependent on Bolivia for its gas imports, Brazil is now looking for more stable and competitive alternatives. Vaca Muerta appears to be a practical and strategic solution, offering competitive production costs compared to Brazilian offshore fields.
At the same time, Argentina is working to improve its transport infrastructure to meet growing demand. A series of bi-directional pipelines and new liquefied natural gas (LNG) export capacity projects are underway, including a floating terminal supported by Pan American Energy and Golar LNG, planned for 2027.
Diplomatic and energy perspectives
Beyond economic issues, this partnership is part of a strategic diplomatic dynamic to strengthen bilateral relations between Brazil and Argentina. Brazilian Ambassador Julio Glinternick Bitelli stressed the importance of this agreement to diversify Brazil's energy supplies while consolidating regional cooperation.
Vaca Muerta's production potential could transform Argentina into a key energy supplier for the region. By 2030, the basin's oil production is expected to exceed 1 million barrels per day, while gas production could reach 250 million m³/d, according to PwC. Such an expansion is expected to generate an energy surplus of $30 billion, compared to a current deficit.
For Petrobras, a return to Argentina represents an opportunity not only to diversify, but also to strengthen bilateral relations. This collaboration could also encourage other regional players to invest in joint energy projects, paving the way for increased energy integration in South America.
