Argentina's energy bust leads to 'ghost town'

Video credit: Reuters - Politics
Published on February 19, 2020 - Duration: 02:25s

Argentina's energy bust leads to 'ghost town'

Uncertainty is swirling around the Vaca Muerta shale play, believed to have massive potential as one of the world's largest reserves of unconventional oil and gas.

The impact is apparent in Añelo, where construction projects aimed at accommodating newcomers have stalled.

Yahaira Jacquez has more.


Argentina's energy bust leads to 'ghost town'

Vaca Muerta is thought to contain one of the largest reserves of unconventional oil and gas in the world.

The shale deposit covers an area about the size of Belgium.

And remains largely untapped.

That's why the success of Vaca Muerta is key for Argentina... a nation that for decades has failed to break free of cyclical crises and is now grappling with inflation above 50% and a $100-billion pile of sovereign debt.

But more than a dozen interviews with energy executives, developers and locals in Añelo, considered the capital of Vaca Muerta, show that the area isn't quite living up to its potential.

Leading energy giants like Halliburton - once committed to tapping the reserves - to grow increasingly impatient.

As well as thousands of Argentines, like Alberto Valenzuela, whose hopes for a better life in Añelo, haven't materialized.

(SOUNDBITE) (Spanish) LOCAL RESIDING IN ABANDONED CONSTRUCTION SITE, ALBERTO VALENZUELA, SAYING: "Today we have come to terms that this is the end of an era for us.

This idea we had of wanting to live in peace and better.

Several key gauges of oil industry health have deteriorated in the region, according to data and union officials.

By January, there were just 24 active rigs to extract unconventional oil and gas at Vaca Muerta, down 37% from the end of July.

Experts say the the problem stems from a lack of clarity on the rules of play as well as worries surrounding Argentina's new leftist president Alberto Fernandez... who, according to a source, failed to present a plan for the Vaca Muerta shale play at a January meeting with energy executives.

The impact can be seen in Añelo, once a shale boom town with new condos and businesses springing up seemingly overnight.

Businesses have shut down and construction projects abandoned.

Though some stakeholders remain optimistic that activity could still pick up..

Citing Vaca Muerta's long-term potential.

But not - Valenzuela, the 47 year old father of 2 says he and his family will be leaving.

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