Argentina leads natural gas production in Latin America

Argentina is the largest producer of natural gas and the fifth largest producer of crude oil in Latin America.

The classification is based on 2019 production, according to the 2020 edition of the BP Statistical Review of World Energy, published in June 2020.

Since 2012, the Argentine government has controlled YPF, which as of December 31, 2019 had interests in 127 oil and gas fields in Argentina.

YPF, in association with private partners, also participates in projects related to the exploration and development of unconventional resources, including shale oil and gas, mainly in the Vaca Muerta formation located in the Neuquén and Río Negro provinces.

Natural gas

In early 2004, Argentina began to experience power shortages, which initially led to a decline in exports of natural gas and other energies, but eventually affected the entire Argentine economy.

In 2015, the government took various actions aimed at ensuring the supply of electricity to the country.

Also, with respect to natural gas, in 2014, the government launched «Gas Plans» to promote gas production, whereby the production of «new» gas above the rate of decline of the fields was paid at 7.5 dollars / MBTU.

Then, in 2017, Resolution 46/2017 established a price for additional unconventional gas production of 7.5 dollars/MBTU for 2017 and 2018, reduced to a price of 7.0 dollars/MBTU for 2019, 6.5 dollars/MBTU for 2020 and $ 6.0/MBTU by 2021.

After a transitional period of price regulation at the wellhead, starting in 2018, price negotiations between distribution companies and national natural gas producers and intermediaries are free.

In the case of electricity, transmission and distribution rates were set to gradually increase between 2017 and 2018.

Finally, on July 5, 2019, the government launched an international public bidding process for the construction of a new gas pipeline that will connect the Vaca Muerta region with the city of San Nicolás, on the banks of the Paraná River, in the province of Buenos Aires.

The president of Argentina, Alberto Ángel Fernández, will make an official visit to Mexico from February 22 to 24, 2021.