Eni and Abu Dhabi’s XRG Buy Into YPF’s Vaca Muerta Gas

Markets

Argentina’s dream of exporting gas from Vaca Muerta just gained two heavyweight backers, with an Italian major and an Abu Dhabi state vehicle each buying a slice of the wells that will feed it.

On Monday, June 29, Eni and XRG signed agreements to take equity in three upstream blocks in Argentina’s giant shale formation. It is the moment a long-discussed export plan started to look like a funded one.

Under the deals, Eni and XRG will each hold 32% of the blocks. Argentina’s state-controlled producer YPF keeps the remaining 36% and stays as operator.

What the Vaca Muerta deal actually covers

The three blocks are named Meseta Buena Esperanza, Aguada Villanueva and Las Tacanas. All sit in the onshore shale basin in Argentina’s southwest, and all are run by YPF.

According to Eni’s own announcement, the gas from these blocks is earmarked to supply the wider Argentina LNG project. The point of the purchase is to lock in the raw material before the export machine is built.

The transaction is not yet final. As World Oil reported, completion still depends on regulatory approvals, a standard step for deals of this size.

Why two foreign giants are betting now

For a London or Munich reader, the names matter. Eni is Italy’s national energy champion and a specialist in floating liquefaction, while XRG is the international investment arm of Abu Dhabi’s state oil company, ADNOC.

Both are doubling down on the same bet: that Vaca Muerta can become a new, reliable source of gas for a hungry world market. XRG’s energy chief called the formation one of the world’s most attractive gas resources.

The timing is not accidental. The International Energy Agency has estimated that conflict in the Middle East disrupted around 120 billion cubic metres of liquefied gas supply projected for the rest of the decade.

That gap sharpens the appeal of a fresh supplier far from those tensions. For XRG, the stake also slots into a portfolio that already spans the United States, Azerbaijan, Turkmenistan and Mozambique.

The export machine being built

The end goal is Argentina LNG, an integrated plan to pull gas from the shale and ship it abroad as a liquid. It is designed to export 12 million tonnes a year once fully running.

Rather than build a vast onshore plant, the partners plan two floating liquefaction vessels, each handling 6 million tonnes. That floating design lowers the upfront cost and speeds up the path to first cargoes.

The three companies first signed a joint development agreement in February, then an initial pact late last year. Monday’s purchase turns that paper framework into committed money in the ground.

It is also a sign of how the cast has shifted. An earlier version of the export dream leaned on Malaysia’s Petronas, before that partnership lapsed and YPF rebuilt the project around new names.

What it means for Argentina

For Argentina, the stakes are macroeconomic. Turning Vaca Muerta into an export engine is central to President Javier Milei‘s hope of rebuilding the country’s foreign-currency reserves and steadying a long-fragile economy.

The country has been chasing this prize for years, with a string of partners and pipelines, a story traced in our look at how the shale boom is reshaping the economy. Bringing in Eni and an Abu Dhabi investor adds both capital and credibility.

It also feeds a bigger regional contest, as neighbours position themselves to carry or buy Argentine gas, explored in our coverage of the South American energy map. The catch, as ever, is delivery: floating units, financing and approvals all have to line up before a single cargo sails.

Frequently Asked Questions

What did Eni and XRG buy in Vaca Muerta?

Each agreed to acquire a 32% stake in three upstream gas blocks, named Meseta Buena Esperanza, Aguada Villanueva and Las Tacanas. Argentina’s state-controlled YPF keeps the remaining 36% and operates all three, with the deal still subject to regulatory approval.

What is the Argentina LNG project?

It is an integrated plan to extract gas from Vaca Muerta and export it as liquefied natural gas. It is designed to ship 12 million tonnes a year, using two floating liquefaction vessels of 6 million tonnes each rather than a large onshore plant.

Who are Eni and XRG?

Eni is Italy’s national energy major and a specialist in floating liquefaction projects. XRG is the international investment arm of ADNOC, the state oil company of Abu Dhabi, with a global portfolio of gas and LNG assets.

Why does this matter for Argentina?

Turning Vaca Muerta into an export business is central to rebuilding Argentina’s foreign-currency reserves and steadying its economy. Securing two major foreign backers adds capital and credibility, though financing, approvals and the floating units must still come together before exports begin.