There are few greater disincentives to investment than political and economic turbulence, political interference or, for that matter, all three. Sanctions have not helped, but the record of Venezuela’s oil production speaks for itself. In 2000, shortly after Hugo Chávez became president, the country was producing over 3 million barrels of oil a day, a figure that has since fallen by two thirds. We will have to see what happens now.
Further to the south, Argentina’s Javier Milei is well aware of the effect that politics and economics have played in discouraging investment in Argentina and has been working to transform international perceptions of his country. Memories of the past don’t fade overnight, nor do more tangible legacies such as the country’s capital controls, which, although greatly eased under Milei, still linger on in residual form. And there is also the fear, reduced perhaps after the success of Milei’s LLA in recent midterm elections, that the next presidential election will signal a return to the bad old days. It was to this end that Milei secured the passing of a fiscal and regulatory regime (known by its acronym, RIGI) which is designed to offer long-term fiscal and regulatory protection to those investing significant sums in long-term projects in certain industries, including oil and gas, of which Argentina has substantial reserves and where production is again recovering after a long period of underperformance.
So the news that horizontal drilling pioneer Harold Hamm’s Continental Resources has been buying interests in Argentina’s massive Vaca Muerta (“Dead Cow”) oil field is encouraging and, the Financial Times reports, should be followed by further investments of $100-200m a year, a number that could rise. Vaca Muerta, with geology similar to that of the Permian Basin in New Mexico and Texas, is estimated to hold the world’s second largest shale gas reserves and fourth largest for shale oil. That could be handy, with some suggestions (albeit not for the first time) that the U.S. has now reached peak shale (oil). Continental is the first pure shale producer to buy in Vaca Muerta.
Hamm told the FT that his company “like[s] the rock” in Vaca Muerta, but he also likes the way that Milei is transforming Argentina. “He could be on his way to a real turnaround. . . . We think it could be a real deal for the country and for our company as well.”
“Capitalism is great,” Hamm has said in the past, surely more than once. It is not hard to see why he is drawn to Milei, a man unimpressed by the way that the “warmth of collectivism” left his country out in the cold for so long.
Under new management, Argentina’s GDP grew by between 4.5-5.5 percent in 2025. Forecasts for 2026, less of a bounce back year, stand at between 3-5 percent. Inflation dropped to around 31 percent in 2025. This decline is expected to continue in 2026, although estimates for full year inflation are all over the place, ranging from 10-20 percent. In 2023 it was 211 percent.