Shell Considers Asset Sales in Argentina’s Shale Heartland

Shell may be considering leaving the Vaca Muerta shale play in Argentina, Reuters has reported, citing unnamed sources. Both a partial asset sale and a full exit are on the table, according to the report, with the deal or deals potentially fetching billions.

The Vaca Muerta play is considered the second-largest shale oil and gas formation in the world, which has made it a magnet for energy companies, including several Big Oil heavyweights that have invested substantial amounts into developing the resources in the play.

Shell specifically has been in the Vaca Muerta since 2012, currently operating four blocks with a majority stake, Reuters noted in its report, adding that Shell had booked total oil and gas production of 15.6 million barrels from the Vaca Muerta in 2024. According to the company, some of its producing assets in the play can break even at $50 per barrel of Brent

Vaca Muerta—Spanish for ‘dead cow’—has been dubbed the Argentinian Permian, although its geologic properties have been compared more appropriately to the Eagle Ford. The shale play is estimated to hold recoverable resources consisting of 16 billion barrels of oil and 308 trillion cubic feet of natural gas. Those numbers make the Vaca Muerta the world’s second-largest shale gas deposit and the fourth-biggest shale oil resource.

Thanks to the resources in the Vaca Muerta, Argentina last year hit an all-time high in oil production of over 816,000 barrels daily. This turned the country into the fourth-largest oil producer in Latin America, reinforcing its attractiveness to energy investors.

All this makes for an opportune moment for Shell to sell some assets there as part of a broader divestment program launched when Wael Sawan took the helm and began to steer Shell back to its core business after mixed success with the energy transition that has incurred certain costs.

By Irina Slav for Oilprice.com

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