Macroeconomic and political uncertainty could stymie development of Argentina’s vast Vaca Muerta shale play in western Argentina, leading to a greater need for natural gas imports.

Argentina rig count

“There is a lot of uncertainty because of the exchange rate, macroeconomic conditions, and fracking activity which is almost halted, not only due to the pandemic effect but because of above ground conditions,” said Alvaro Ríos, the managing partner of consultancy Gas Energy Latin America.

Last week, Argentina tightened capital controls in a bid to bolster foreign reserves, further limiting access to dollars in the squeezed local economy. Meanwhile, Argentina’s gross domestic product fell a record 19.1% in the second quarter compared to the same period last year as the nation maintains strict...