Milei’s expanded incentive plan set to draw shale oil investors

President Javier Milei’s marquee programme for luring investment into Argentina is poised to attract a new round of applications from crude producers after his administration broadened it to include shale oil wells.

YPF SA, Vista Energy SAB, and Pampa Energía SA said on recent earnings calls that they were all eyeing the programme. Known by its Spanish acronym RIGI, the incentive scheme provides 30-year tax breaks and freer customs and export rules.

RIGI’s scope was expanded on February 19 to spur development of virgin oil fields in the Vaca Muerta shale patch. A dedicated pipeline and a port for crude exports are being built quickly, and the US shale industry – which is running out of prime acreage – is taking an interest in migrating to Argentina.

“It will help for sure to develop the full Vaca Muerta,” YPF Chief Executive Officer Horacio Marín said Friday on the state-run company’s fourth-quarter earnings call. His comments were echoed by executives at Vista and Pampa on their respective calls.

For Matías Cattaruzi, an equities analyst at Adcap in Buenos Aires, incorporating shale oil drilling into RIGI “will help to accelerate investments in blocks that were expected to be developed closer to 2029–30 and could now be brought forward a few years.” He said the tax breaks alone would boost returns on those blocks by up to 12 percent.

By some estimates, the RIGI programme has already drawn applications from energy and mining projects that would require a total investment of more than US$50 billion.