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Associated PressSep 29
Argentina, Brazil Sign Deal for Vaca Muerta Gas
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Above: Oil pipelines and storage facilities are seen at Vaca Muerta shale oil and gas drilling, in the Patagonian province of Neuquen, Argentina on Feb. 15, 2023. Image copyright: Contributor/NurPhoto via Getty Images
The Facts
Argentina and Brazil signed a memorandum of understanding earlier this week on the sidelines of the G20 summit in Rio de Janeiro over the export of natural gas from Argentina's Vaca Muerta formation to Brazil starting next year.
The deal sets up a bilateral working group to study measures, including infrastructure and logistics routes, to allow Brazil to buy about 2M cubic meters per day by early 2025, and to reach 30M cubic meters per day in 2030.
The Spin
Narrative A
Regardless of the political differences of their leaders, Argentina and Brazil are on the cusp of a transformative win-win energy partnership centered on natural gas exports. Potential economic benefits overcome environmental concerns over shale gas extraction, as this deal may boost industrial competitiveness and energy cooperation in South America.
Narrative B
Vaca Muerta and its shale fields are more of a curse than a blessing to Argentina, as too much focus on them has diverted investment further away from renewable energy — and into dirty and dangerous fracking instead. With this new agreement, Brazil may also fall into this trap despite its renewable energy capacity.
