Libertarian Milei’s Argentina is fast becoming the Texas of Latin America
President Javier Milei has flawless timing. Argentina’s shale boom has reached industrial take-off just as he embarks on his extreme libertarian experiment: a Hayekian free market assault on the delinquent Peronist state and all its works.
The long-suffering nation is swinging very fast from a costly dependence on energy imports, and a chronic leakage of hard currency, to the happier condition of net hydrocarbon exports.
The prolific shale basin of Vaca Muerta is finally delivering.
The US Geological Survey estimates that the region holds the world’s second biggest reserves of shale gas, and fourth biggest reserves of shale oil.
Drilling has begun at another shale basin at Palermo Aike in Argentina’s deep south, so the potential could be significantly larger.
McKinsey estimates that new fracking technology – smart drills, geonavigation, multi-drilling from the same pad – has cut production costs to $36 a barrel, an irresistible business in a world market with a structural price of $80-$90.
Ambrose Evans-Pritchard Telegraph 8 May 2024
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