Argentina's Energy Sector to Hit $16.5 Billion Investment by 2026 Amid Deregulation

Argentina anticipates significant investments in its energy sector, reaching up to $16.5 billion by 2026 due to market deregulation policies. The Energy Secretary highlighted that these reforms aim to improve investment climate and facilitate energy exports. The investments are set to radically boost the country's energy production and trade surplus.

Argentina is forecasting a substantial rise in investments for its energy sector, targeting up to $16.5 billion by 2026 as part of broader efforts to deregulate the market, Energy Secretary Eduardo Rodriguez Chirillo announced on Tuesday.

At a Shell event, Rodriguez outlined that deregulation measures are key to creating a favorable business environment that attracts investment. With record levels of production, the new policies are expected to bolster existing investments.

The administration under President Javier Milei has undertaken significant economic reforms, primarily aiming at reducing state control to facilitate energy exports and deregulate local prices. This could open up substantial foreign currency inflows.

The Energy Secretary detailed that anticipated energy investments will be around $12.5 billion in 2025 and $14 billion in 2026, with the RIGI investment promotion scheme potentially adding up to $2.5 billion each year. Shell's annual investment of $500 to $600 million could also see an increase under these new regulations.

Rodriguez noted that the RIGI mechanism is essential for attracting otherwise unavailable investments, though he did not specify the figures. Shell currently produces 50,000 barrels of oil daily in Argentina and aims for 70,000 barrels by the end of 2025.

Argentina's significant Vaca Muerta shale formation, the world's second-largest in shale gas and fourth-largest in shale oil, is set to reverse a long-standing energy deficit. Energy and mining official Daniel Gonzalez predicts a trade surplus between $4 billion to $5 billion this year, potentially doubling in 2025.

Gonzalez observed that the country's macroeconomic stability remains a hurdle to realizing these surpluses.

(With inputs from agencies.)