Shell Weighs Selling Assets in Argentina’s Key Shale Region

Shell Weighs Potential Departure from Argentina's Vaca Muerta Shale

According to a Reuters report citing anonymous sources, Shell is contemplating either a full withdrawal or a partial sale of its assets in Argentina's Vaca Muerta shale region. Such a move could generate billions of dollars, with both options reportedly under consideration.

Vaca Muerta: A Global Shale Powerhouse

Recognized as the world’s second-largest shale oil and gas reserve, Vaca Muerta has attracted significant investment from major energy corporations. Its vast potential has made it a focal point for industry leaders seeking to tap into its resources.

Shell’s Involvement and Production Highlights

Shell entered the Vaca Muerta in 2012 and currently holds a majority interest in four operational blocks. In 2024, the company reported a combined oil and gas output of 15.6 million barrels from this region. Some of Shell’s producing sites in Vaca Muerta are profitable even when Brent crude prices are at $50 per barrel.

Resource Estimates and Global Standing

Translating to “dead cow” in Spanish, Vaca Muerta is sometimes called the “Argentinian Permian,” though its geology is more akin to the Eagle Ford formation. The area is believed to contain 16 billion barrels of recoverable oil and 308 trillion cubic feet of natural gas, making it the second-largest shale gas and fourth-largest shale oil reserve worldwide.

Argentina’s Oil Boom

Fueled by Vaca Muerta’s resources, Argentina achieved a record oil production of over 816,000 barrels per day last year. This milestone elevated Argentina to the position of Latin America’s fourth-largest oil producer, further enhancing its appeal to global energy investors.

Strategic Timing for Shell’s Asset Sale

This period presents a favorable opportunity for Shell to divest some of its holdings as part of a larger restructuring initiative. Since Wael Sawan assumed leadership, Shell has been refocusing on its core operations after mixed outcomes from its energy transition efforts.

By Irina Slav for Oilprice.com