The oil market in Mendoza is settling down and production will fall in 2025.

In the cumulative period from January to May 2025, oil production in Mendoza fell by 2.7% , compared to the first five months of 2024, according to data from the National Energy Secretariat .

The provincial government had celebrated a 1% increase in production last year, which is doubly encouraging. On the one hand, it reversed an annual decline that reached 4%. On the other, this was achieved with mature wells, which typically experience a 10% to 12% annual decline.

However, in 2025, two clusters included in the Andes Plan were transferred , through which YPF left mature fields throughout the country - the third, Llancanelo, had already been completed in 2024, but its production is very low - and the transition had its impact on crude oil extraction.

On the other hand, YPF, which accounts for more than half of Mendoza's oil production , saw a 20% decrease in the amount of cubic meters of hydrocarbons obtained between January and May 2024, and the same period in 2025. Of course, this decrease was largely offset by the increase in other oil companies.

The bet is that the new concessions will allow production to be sustained or even increased, based on the committed investments. And also, although more in the medium to long term, the results of exploration in Mendoza's Vaca Muerta region are expected to allow for progress in unconventional exploitation.

Pescarmona will control the oil extracted in the province

The director of Hydrocarbons of the province, Lucas Erio , stressed that it is always necessary to start from the basis that, in general terms, mature wells have a productive decline of 10 to 12% annually , so, if the year were to close with a 2% drop, 10 percentage points would be "gained."

However, he noted that while the decline is natural, as it is a non-renewable resource, the new operators are expected to slow the rate of decline considerably .

Regarding Petróleos Sudamericanos , he indicated that the company has six rigs working—three for pulling and three for workover—and that, in just over two months, it has intervened in 30 wells (of the nearly 800 in the Mendoza Norte cluster).

On the other hand, he emphasized that he plans to invest more in 2025 than he committed to when signing the concession extension agreement for some areas. He explained that he had planned to spend approximately US$2.5 million so far, but has exceeded US$7 million.

Furthermore, workover or well abandonment had not been planned, and the company decided to move forward with both activities. "This will not impact production in the very short term, but the decline will be smaller," the official noted.

Regarding the joint venture formed by Quintana Energy and TSB , the new concessionaire of the Mendoza Sur cluster, Erio commented that these areas are within an operating block that also includes others in Neuquén, so the company is waiting for the transfer in the neighboring province to be finalized in order to begin operating those fields.

South American Petroleum Barrancas Andes Plan 1.jpg

Statistics from the National Energy Secretariat reveal the changes that have occurred in the province's hydrocarbon exploitation map . From January to May 2019, YPF obtained 1,127,676 m3, representing 65% of the total produced in Mendoza .

In the same period of 2025, it obtained 692,744 m3, 39% less, and lost share, falling to 52% of the provincial total (which also decreased by 23%, going from 1,721,749 m3 in the first five months of 2019 to 1,319,223 m3 so far this year).

Puspetrol remains the second largest oil company , with 323,347 m3, a 4% decrease over the last six years. However, this year a new player has emerged: Petróleos Sudamericanos, which, in just two months of production (April and May), took third place , with 115,203 m3.

Petroquímica Comodoro Rivadavia follows with 68,154 m3 from January to May, doubling the company's production from six years ago. Next in production volume are: Aconcagua Energía, with 42,219 m3 (up 7%); El Trébol, with 22,061 (down 6%); CGC Energía, with 18,702 (down 46%); Hattrick Energy, with 15,449 (up 82%); and Venoil, with 13,724 (up 310%).

Historic production: Argentina reached a record for oil and gas production in 2024. Photo: Courtesy

When talking about progress with unconventional oil in Mendoza, one cannot help but remember that it took Neuquén more than 15 years to reach this point (although that time can be shortened by taking advantage of the lessons learned from that experience). However, this could change the outlook for inevitable production decline.

Erio stated that the TSB-Quintana joint venture has already submitted the General Environmental Impact Statement to the Environmental Management and Oversight Directorate for the unconventional exploration project in Cañadón Amarillo (part of the northern tongue of the Vaca Muerta formation). This is in order to conduct 3D seismic surveys, which will allow them to finalize the location of the proposed exploration well.

Meanwhile, YPF was also preparing the same presentation, which initiates the Environmental Impact Assessment process and the permits to be submitted to the General Department of Irrigation for the use of water in the process. In this case, the location of the second exploratory well has already been determined, with specific coordinates.

While the Director of Hydrocarbons maintained that caution is needed because these are exploration projects, which entail risk, he noted that it's difficult for an investor to decide to invest US$44 million—as is the case with the Quintana-TSB Joint Venture—if there isn't an interesting prospect. The same is true for YPF, which is withdrawing from conventional fields throughout the country but has decided to continue exploring unconventional fields in Mendoza.