Argentina's paradoxical growth: Shale wealth grows as jobs disappear elsewhere

Ramiro Ramirez is a mechanic who found work within a month in Vaca Muerta (Argentina), home to one of the largest shale gas and oil reserves. He earns ten times more than he did as a cook.

It is not an easy job. Ramirez, 25, leaves Neuquen Province at 5 am for the daily two-hour drive to the oil fields near the dusty, small town of Anelo. The area has been flooded with people seeking jobs since production in the formation increased sharply over the past few years.

He wants to build a career in Vaca Muerta. It's a bright spot on President Javier Milei’s austerity-heavy playbook, which contrasts sharply with the job losses that are happening across the country.

Ramirez said, "I feel good overall." These are highly desired positions.

Vaca Muerta may be a powerful force in transforming Argentina's economy. The country needs dollars to control inflation and pay back loans to the International Monetary Fund. YPF (Argentina's state-run power company) projects that the new formation will produce $50 billion in export dollar by 2031. This is equal to Argentina's agricultural sector.

The future is bright: Argentina will have its biggest energy trade surplus since nearly 20 years in 2024. Last year, it broke its previous record by exporting energy worth $11.1 billion.

Milei, according to economists, is wise to concentrate on capital-intensive industries such as Vaca Muerta. He has called it "the new panacea for Argentina." They warn that as Vaca Muerta takes shape, Argentina will wait for economic relief.

Neuquen, in the western Patagonia region of Argentina, has the highest private sector average salary in Argentina. Many parts of Argentina are suffering due to the loss of manufacturing and construction jobs as a result of Milei's lowering of import duties, suspension of federal projects, and austerity policies that have reduced purchasing power.

Kristalina Georgeeva, IMF's Managing Director, recently praised Milei for reducing the once staggering inflation rate but pointed out sectors that were hurting. She said Argentina needed to improve conditions so businesses and individuals could take out loans from banks and mortgages.

Lucas Pussetto is an economist from Argentina's Austral University. He said, "There's absolutely no way that Argentina can ignore (Vaca Muerta)". No."

Milei has stated that job losses in certain sectors are inevitable as Argentina's economic opening and competition increase.

The Economy Ministry of Argentina said in a press release that, "as with any economic transformation process, there are differences in the initial stages of recovery between the different sectors" but that, "the objective is for growth to gradually extend to other sectors and translate to greater formal job creation."

Two Argentians

Ramiro, 35, who works on an aerial platform in a shale-field, is a front row seat for the transformation of Vaca Muerta. New production wells and plants appear quickly.

He said, "It looks just like Texas."

Exploration began in earnest at the beginning of 2010. Energy experts say that while presidents of all parties have backed its development, Milei's RIGI program, a combination of tax breaks and regulatory stabilization, has been credited with attracting $25 billion of approved energy investment. His 'liberalization of gas and oil prices, and the easing of import regulations that have facilitated technology purchases has also been beneficial to industry.

Vaca Muerta's production will accelerate with the gradual startup of two private-sector projects around late 2026 and 2027: a 550,000-barrel-per-day oil export pipeline and infrastructure for Argentina to begin exporting liquefied natural gas.

Some question the RIGI’s long-term effects, pointing out that it allows companies avoid a requirement for them to convert foreign currencies through Argentina’s exchange market after their third or fourth investment year.

The dividends might not be returned to the country in the long run, said Juan Jose Carbajales. He was a former hydrocarbons undersecretary in the government of former President Alberto Fernandez.

Guido Zack is an economist with the Fundar think tank in Buenos Aires. He said that the RIGI requires employers to employ only 20% of local workers, and the Vaca Muerta boom should not hide the job losses caused by the closing of conventional oilfields in favor of shale.

Fundar reports that Milei has closed 28,000 businesses in Argentina, or 5.5%.

Zack stated that "we have two Argentinas today, one Argentina that is growing and the other Argentina that is falling." The time to improve the living conditions of a large part of the populace is now. How long will we have to wait?

Avoiding a BOTTLENECK

It is not possible to guarantee that Vaca Muerta will continue to develop at a rapid pace.

The Argentine Institute of Oil and Gas, in a report for 2025, found that this sector would need between 30,000 and 43,000 additional workers over the next few decades.

In March, YPF and the oil industry opened the Vaca Muerta Institute to train workers. More than 17,000 people have applied.

Neuquen’s average monthly wage in the oil and natural gas sector is $5.600. This compares to the average salary of the private sector in Buenos Aires, which is $1.800.

Recenty, in the vicinity of Vaca Muerta oil fields, a group of students from the institute stood on a drilling rig and listened to an instructor tell them that they would one day be certified climb up to the upper platform to maintain the machine. He warned that some people get vertigo.

Daiana Emilia Rodrguez, 33, was a police officer with a background in industrial maintenance. She said that there were many options available. "There are many companies who can hire you right now," she added.

Gustavo Schiappacasse of the YPF Foundation who helped to create the institute said that the school will train 2,100 people before December. Oil companies like Tecpetrol are reaching out to more high schools for the purpose of training future engineers and technicians.

Andrea Fernandez is Tecpetrol's community relations manager. She added, "It feels like a war to attract talent."

Daniel Dreizzen is the managing director of Aleph Energy. He said that Vaca Muerta’s rapid growth depends not only on workers but also on pipeline infrastructure, roads, and financing.

He said that if this doesn't occur, the situation will develop slowly.

'LAND OF OPPPORTUNITIES"

A replica of Wall Street’s charging bull decorates the front of a modest Hotel in Anelo. A high-end gym chain is located just around the corner. A large sign advertises investment in a nearby mall, "Land Of Opportunities".

A town of about 18,000 people has received so many migrants, that the mayor publicly asked workers to not move there with their family because services were saturated. This month, people waited in line outside a coffee shop near a gas station for interviews at a security firm. Many had come from the poorer northern province of Jujuy.

Alfredo Aguilera is a 25-year-old man who arrived from Formosa province, where he was a merchandiser. Now he earns twice as much as a cashier at a gas station. He learned after arriving that oil and gasoline companies were looking for skilled workers. He would take a course in order to enter the industry.

He said, "I secure my future if I get into that." It would be a wonderful dream. (Reporting and editing by Rod Nickel; Additional reporting by Eliana Razewski)

(source: Reuters)