Fracking: From the Texas Boom to Argentina’s New Promise by Palermo Aike
Over the past 12 years, the fracking and shale oil industry has boomed in Texas and New Mexico , turning these two US states into the heart of a revolution that has shaken up the global oil market and become a nightmare for OPEC. However, the prospects for oil in Texas and New Mexico are limited: reserves are rapidly depleting and the quality of the crude extracted is declining, with more water than oil.
Thousands of kilometers away, 9,760 km to the south, the fracking industry could experience a new golden age, albeit on a smaller scale, thanks to Argentine fields. In addition to the famous Vaca Muerta , another promising field is emerging: Palermo Aike. YPF , Argentina's state-owned oil company, has announced the drilling of three exploratory wells in this formation, located in Cuenca Austral, near the city of Río Gallegos, in the province of Santa Cruz.
Palermo Aike: an alternative to Vaca Muerta?
Experts point out that Palermo Aike has similar geological characteristics to Vaca Muerta, despite being smaller in size. In terms of gas, its potential is about a third of that of Vaca Muerta, while for oil it is estimated that it can produce up to 10 billion barrels, compared to 16 billion for Vaca Muerta. Despite this, Palermo Aike represents the second most important unconventional hydrocarbon formation in Argentina.
Where is the Palermo Aike deposit located?
The Palermo Aike formation, with a depth of 3,000 to 3,500 meters and a marine origin, is the most similar to Vaca Muerta in terms of size and potential. If the exploration results are positive, YPF and CGC (Compañía General de Combustibles) plan to invest in additional wells and associated infrastructure to develop part of the area.
Three exploratory wells to confirm the potential
YPF has signed an agreement with the province of Santa Cruz to start drilling three exploratory wells in Palermo Aike in 2025: two in the La Azucena area and one in Campamento Este. The agreement was signed during a meeting between the governor of Santa Cruz, Claudio Vidal, and the president of YPF, Horacio Marín. On this occasion, YPF ceded to the provincial company Fomicruz some areas of conventional extraction, including Cerro Piedra-Cerro Guadal Norte, Barranca Yankowsky, Los Monos, El Guadal-Lomas del Cuy, Cañadón Vasco, Cañadón Yatel, Pico Truncado-El Cordón, Los Perales-Las Mesetas, Cañadón León-Meseta Espinosa and Cañadón de la Escondida-Las Heras. This move is part of YPF's strategy to focus on unconventional fields, particularly Vaca Muerta.
Fracking as Hope for Argentina
Argentina is experiencing a renewed enthusiasm for oil and fracking, after years of stagnation and lack of investment. According to the International Energy Agency (IEA), in April 2025, Argentina's production increased by 15,000 barrels per day, reaching 890,000 barrels per day, thanks to a record 2,214 hydraulic fracturing phases. Fracking activity increased 13% from the previous month and 31% from a year ago, mainly concentrated in the Vaca Muerta "black oil window" in Cuenca Neuquina.
The IEA expects production to increase by 70,000 barrels in 2025 and 60,000 in 2026 , thanks to new extraction capacity, increased fracking activity and recent economic reforms. Argentine shale oil production is estimated to reach 960,000 barrels per day in 2026, up from 900,000 forecast for 2025. This development represents hope for Argentina, which is banking on shale oil to increase exports and bolster its foreign exchange reserves.
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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/fracking-texas-palermo-aike-argentina/ on Fri, 06 Jun 2025 19:10:12 +0000.