Mideast conflict puts Argentina’s Vaca Muerta shale in focus, analysts say

Argentina has launched its biggest Vaca Muerta shale bid round in a decade, offering 15 exploration blocks as energy companies and importing nations seek more reliable crude supplies amid heightened Middle East tensions.

The auction, run by Neuquen provincial energy company Gas y Petroleo del Neuquen (GyP), comes as concerns over disruption to oil flows through the Strait of Hormuz sharpen interest in supply sources outside the region.

Consultancy Rystad Energy said Vaca Muerta, the largest commercial shale play open to international oil and gas companies outside North America, could produce more than 1 million barrels per day of crude by the end of the decade.

The blocks on offer stretch across the basin, from condensate-rich areas in the northwest to oil-focused acreage in the northeast and frontier zones in the south. The round is more than double the six blocks offered in the previous provincial auction.

Rystad said the sale gives international firms one of their best chances in years to secure fresh acreage in Vaca Muerta, where most recent deals have involved acquisitions and farm-ins rather than new licenses.

Interest has grown as pipeline and export infrastructure expands. Rystad said breakeven prices in the most prospective blocks range from $32 to $49 per barrel, making them competitive with established global shale plays.

U.S. producer Continental Resources recently acquired a 90% stake in the Los Toldos II Oeste block and later farmed into Pan American Energy assets, underscoring rising overseas interest.

Bidders will compete on carried working interest for GyP, royalties above a 15% minimum, work commitments and an access bonus starting at $500,000 per block.

(Reporting by Kylie Madry)