Can ‘Argentina’s Texas’ save the country’s economy?
- The San Juan Daily Star
- 2 hours ago
- 6 min read
By EMMA BUBOLA
Much of the sun-bleached desert in northwest Patagonia looks like it did 100 million years ago: a vast, prehistoric expanse where the world’s biggest dinosaurs once roamed.
But a different kind of behemoth has now come roaring in, with towering rigs advancing across the desert floor and burrowing deep beneath it in a furious rush for oil and gas.
The rigs’ gigantic iron legs are extracting shale oil and gas at levels never seen in Argentina before, turning a quiet stretch of the country into the thrumming center of a new oil and gas boom that is fueling a wave of optimism about the future.
“We reached the promised land,” said Raúl Krasuk, 69, who manages wells at the site for Vista, an Argentine energy company, as he sat in an oil field cafeteria that serves chicken breasts to workers who have come from all over Argentina for a slice of the bonanza.
President Javier Milei has called the oil and gas deposit — known as Vaca Muerta, or Dead Cow — a “panacea” for Argentina, with the potential to solve the country’s chronic economic instability by flooding it with dollars from exports. He has bet heavily on the project.
For the first time in the country’s history, crude oil overtook soy flour as the top export this year. Now, many in the oil sector invoke the promise of a second boom after the agricultural surge that, more than a century ago, turned Argentina into one of the world’s richest countries.
“This is the big opportunity Argentina has to prosper,” said Rolando Figueroa, the governor of the Neuquén province, home to the shale-rich area many refer to as “Argentina’s Texas.”
The hedge fund of American billionaire Peter Thiel, who has established a foothold in Argentina, recently reported that it had acquired more than $76 million worth of Vista shares.
Still, many question whether Vaca Muerta can truly catalyze the economic rebirth of Argentina, a country hobbled in recent decades by soaring inflation and currency crises. Many businesses are closing as Milei’s austerity measures have weakened domestic demand, while lower trade barriers have opened local firms to cheaper competition, stoking skepticism that the oil boom can generate enough jobs to absorb widespread losses elsewhere.
The economic sectors thriving under Milei — energy and mining — create relatively few jobs, while labor-intensive ones such as manufacturing or retail are suffering.
Milei says that Vaca Muerta will drive broader economic activity, but for now, many workers partaking in the black gold rush arrived on buses with nothing but a backpack and a tent as they fled low pay or a lack of work elsewhere.
So many hopefuls flooded into Añelo, the town closest to the oil and gas reserves, that the mayor has pleaded with outsiders to stop coming.
“There isn’t so much work for everyone,” the mayor, Fernando Banderet, said on Argentine radio last month.
The booming energy sector brings a fresh and much-needed inflow of dollars to cash-starved Argentina, securing it a larger role in global energy markets squeezed by the conflict in Iran. Still, the reliance on fracking is raising local environmental alarms and questions over committing the nation’s future to fossil fuels that much of the world only recently pledged to leave behind.
Despite these questions, and challenges, what is clear is that much of the country has its eyes on Vaca Muerta.
“It’s a revolution,” Banderet said.
‘Vaca Muerta fever’
Banderet arrived in Añelo as a child when it was a small, deprived rural community. He spent much of his youth living in a converted bus, became a father at 16, and started work as a fruit picker.
Now everything has changed. As foreign governments and entrepreneurs courted him for oil-related opportunities in Añelo, he said he attended President Donald Trump’s second inauguration, went on a trip to Israel, and traveled to the Cannes film festival.
“It is the Vaca Muerta fever,” he said.
In the past two years, thousands of people have arrived in Añelo. Some initially slept in tents until they could afford a bed in one of the prefabricated housing units that have popped up almost overnight. Añelo’s population doubled in the past two years, to 12,000, Banderet said, the sound of hammers pounding behind him as the town hall was expanded.
Thrumming had become the town’s soundtrack — a chorus of engines from the oil workers’ white pickups that jam the main road, the grind of cement mixers churning fresh concrete, and the roar of drilling rigs in the distance.
Wild west optimism is visible throughout the province of Neuquén, which surrounds Añelo. Restaurants are full, and hotels and residential complexes are rising, with names like the Shale Hotel or Petroleum Housing Complex. Shopping malls and truck dealerships are sprouting across barren expanses long ruled by winds and dinosaur bones.
High above the banks of the Limay River, young engineers from across Argentina sit in Vista’s high-tech control room remotely monitoring extraction sites.
A few miles away, young Argentines learn oil-field trades free of charge, in a new training institute sponsored by Argentina’s state-controlled oil company, YPF, and other industry players. On a recent afternoon, students used gamelike control stations for immersive work simulations. In a country where huge numbers of young professionals seek opportunities abroad, these students said that they were excited about their careers at home.
“Hello, future of the country!” the school’s director, Gustavo Livoreiro, said as he entered a classroom.
‘Transformational change’
A new vision of the country was emerging in Neuquén — an image different from the fertile farmlands and their gauchos, which have long defined the nation. Here Argentina’s future looks like massive petrol tanks with metallic trunks pointed toward the desert sky, and it smells of diesel as men covered in mud haul drill pipes out from deep inside the Earth.
The Vaca Muerta shale formation, which holds the world’s fourth-largest reserves for shale oil and second-largest for shale gas, had been known for decades, but Argentina only recently secured the investment and imported the advanced technology necessary to extract them at a large scale. Now Argentina produces over 850,000 oil barrels a day, up from about 500,000 a decade ago.
Over the past 10 years, Vaca Muerta has helped transform Argentina’s multi-billion-dollar energy deficit into a surplus, with greater gains expected in the future — especially amid global crises that heightened the appeal of a stable, conflict-free energy supply.
Milei has championed the energy sector with major investment tax breaks and made it easier to export fuel, driving progress on a vital new pipeline. Though past Argentine governments laid the groundwork in Vaca Muerta, Milei’s administration now stands to harvest its rewards.
‘You are in or you are out’
This confidence is not universal. Argentina remains sharply divided about the country’s new direction.
Critics point out that while machinery is roaring in the oil patch, in industrial hubs like the Buenos Aires province, assembly lines have fallen quiet.
The disparity is visible in Neuquén. Many of those who work outside the energy ecosystem — like teachers or municipal workers — are being priced out of basic living. Even here in the country’s energy capital, Milei’s removal of state subsidies has made gas more expensive for many. Some, including some Mapuche Indigenous communities, lack gas connections to their homes.
“This is the paradox of the new Argentina,” said Lef Nawel, a Mapuche activist in Neuquén. “Either you are in or you are out.”
The Mapuche, who hold some of the deepest ties to the land where these operations take place, have been the most staunch opponents of fracking.
They protest polluting gas flares, say chemical waste from the plants is often improperly handled, and warn that the industry’s water consumption threatens to deplete rivers already suffering the effects of climate change.
“They extract the oil and take it away,” said Olga Mabel Campo, a Mapuche community leader. “But we are the ones who stay.”
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