Along the western edge of Argentina’s Patagonia, on an arid steppe nestled against the Andes mountains, lies a shale formation known as Vaca Muerta. And ever since engineers confirmed what an American geologist suspected a century ago — that the Vaca Muerta, or dead cow, contains massive amounts of oil and gas — the rush to replicate the U.S. shale production boom was on.
First came YPF SA, the local oil giant, and Chevron. Then the likes of Total and Royal Dutch Shell. Between them, they poured some $13 billion into exploration over the past eight years. None of them ever had much to show for it, though. Obstacles kept popping up, and production was marginal.