China's largest oil company, PetroChina, is preparing to
establish operations in Argentina by the end of 2025, targeting the
lucrative Vaca Muerta shale formation amid growing scrutiny over
the Milei administration's trade policies.
The oil and gas giant plans to open a Buenos Aires branch
featuring three business units: machinery sales for the oil and gas
industry, including drilling equipment and pipeline infrastructure;
petrochemicals; and after-sales services, according to
Perfil. PetroChina aims to supply companies operating in
the Neuquén Basin and across Argentina's expanding energy sector,
utilising contracts that place delivery and insurance
responsibilities on the seller.
The move comes as PetroChina, which produces approximately
2.57mn barrels of crude oil daily and 383mn cubic metres of natural
gas, seeks to expand its global footprint. The company reported
revenues exceeding $400bn and net profits of approximately $22.7bn
in 2024, cementing its position as a global energy powerhouse.
However, PetroChina's entry has raised concerns among local
businesses already competing with Chinese imports, which account
for 24.7% of Argentina's total imports in the first quarter of
2025, Vaca Muerta News noted. This has resulted in
domestic companies viewing Chinese firms as highly competitive
suppliers offering products at significantly lower prices than
local alternatives.
With Milei’s RIGI large investment programme well underway,
Argentina’s oil and gas sector is attracting an influx of foreign
investments, with Milei and Italian Prime Minister Giorgia Meloni
signing a strategic agreement between
Argentina's national oil company, YPF, and Italian energy giant Eni
for the Argentina LNG (ARGLNG) project.
The timing of this expansion creates potential diplomatic
tensions for President Milei, who has sought to demonstrate
alignment with the United States amid ongoing trade disputes
between Washington and Beijing. The US has expressed concerns over
Argentina's $18bn currency swap agreement with China's central
bank, with Treasury Secretary Scott Bessent urging Argentina to
cancel these obligations. He spoke when he visited Buenos Aires in
April.
Previously, it was reported that US support for
Argentina's latest IMF deal hinged on the Milei government terminating its $5bn currency swap with China,
although this issue ultimately played no role in securing the
agreement.
This delicate balancing act between Chinese capital investment
opportunities and US political pressures could complicate Milei's
efforts to balance the attraction of foreign capital with the
maintenance of strategic relationships with the US.
© 2025 bne IntelliNews, source Magazine
