International companies are not shunning Argentina anymore and exploring mergers and acquisitions (M&A) opportunities, including in the energy sector, as business-friendly reforms enacted by President Javier Milei have started to change the way investors look at South America’s second-largest economy.
If Milei’s reforms to encourage large-scale and foreign investments into the energy sector continue, the M&A market in Argentina could see an upsurge in the coming years, Juan Tripier, director of M&A and corporate finance at PricewaterhouseCoopers (PwC) Argentina, told Reuters in an interview published on Monday.
The government of President Milei has pushed for new legislation, the so-called Large Investment Incentive Regime – or RIGI, by its Spanish initials – offering tax breaks and other incentives for major investors in the South American country.
Argentina’s market deregulation efforts are expected to raise the energy investments in the country by about $2.5 billion to $15 billion in 2025, officials have said.
Last year, Argentina saw 99 M&A deals in all sectors, valued at a total of $8.9 billion, PwC said earlier this year. The energy and resources sector accounted for about 30% of the number of deals and around 70% of the value, with mining bringing in the highest value of M&A.
Argentina is no longer a “bad word” for investors since Milei became president and launched reforms, PwC’s Tripier told Reuters.
“There’s a lot of excitement,” Tripier said.
“That excitement is both shared by international players, or international investors, and local players.”
Argentina’s shale province, Vaca Muerta, is leading a surge in the country’s oil and gas production, after years of failing to live up to the hype that it could be the next Permian Basin.
In December 2024, Argentina pumped a record 757,122 barrels per day (bpd) of crude oil, slightly greater than Colombia’s 755,469 bpd. Activity in the Vaca Muerta is tipped to further soar because of strong global demand for lighter, sweeter oil, which is easier and cheaper to refine into high-quality, low-emission fuels.
By Charles Kennedy for Oilprice.com
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