Can ‘Argentina’s Texas’ save the country’s economy?

IMO, the short answer is no. I live in Neuquen, the oil sector is a small ecosystem. You have major companies and then dozens of smaller "service" companies around it. Everything from piping, catering, trailer maintenance, employee transportation, trucking, fracking raw materials (sand), etc.

The Government owns 51% of YPF, but the value is locked into shares that pay $0 dividends. There was a federal tax on exported crude that was phased out by Milei on crude barrels trading below $65. It caps at 8% above that price. There is an upstream extraction royalty (12%) but this is at a Provincial level. Much of the federal tax revenue comes down stream from fuel at the pump taxes aside from of course corporate federal taxes. However you have to factor in RIGI reducing that as well.

Long story short, what this all means is that Neuquen does well as a Provincia. They are currently running a budget surplus thanks to all the extraction. However, on a federal level, aside from providing the Central Bank desperately needed dollars to stabilize the FX market, I don't see it lifting the country out of it's inherent problems.

I was hoping that with the dollar stability would come domestic lending stability but Milei is running a lot of counter programs to that.
 
In 2025, Vaca Muerte broke the Argentine record for most oil pumped in a year, which dated back to 1998. They will break that record again this year.
This is with fewer employees than in 1998. Fewer Jobs.
In fact, this is with 10% fewer employees than the year before Milei was elected.
So we are seeing higher production, but fewer jobs.
This is the trend in general, globally.
Technology is better. The science of locating where to drill is better. The machinery requires fewer employees, and the trends of higher production with less labor is going up.
In fact, since Argentina is still somewhat behind the curve in terms of infrastructure, tech availablity, and equipment and skilled workers available, we can see farther contractions in the amount of workers vs the volume of oil and gas produced.
Milei claiming a lot of new jobs as a result of Theil's investment is smoke and mirrors.
Increased investment will lead to fewer full time jobs after initial construction is done.
And the government is NOT spending money on the infrastructure that will benefit job growth and business, things like better roads, rail, internet, electricity, schools, technical training, housing,and so on. These are all being cut or privatized.
 
Ries said:
Increased investment will lead to fewer full time jobs after initial construction is done.
And the government is NOT spending money on the infrastructure that will benefit job growth and business, things like better roads, rail, internet, electricity, schools, technical training, housing,and so on. These are all being cut or privatized.
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Excellent point. When you see these sensational headlines politicians throw around like the new natural gas port in Golfo San Matías that will produce 20,000 jobs, this is just for the initial construction phase. Where it does create jobs is in peripheral towns that need to supply workers during that phase, but it's a short term effect that can displace other locals with sudden high inflation and leave the resulting overbuilt town deserted once the project is complete.

As stated earlier, Neuquen is using the tax proceeds to improve Provincial infrastructure; but again, this is not going to be felt in Buenos Aires let alone Chaco.
 
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