Chaco

Commentary

Argentina's pro-investment reforms, including the RIGI regime, and Paraguay's renewed push to attract explorers, through Petropar's review of its Open Round and the September 2026 MoU with Scorpion Oil & Gas, offer some upside. However, the basin remains unproven: the 2024 Tapir x-1 failure led Molecular Energies to signal its exit from Paraguay, none of Petropar's six Chaco blocks has been drilled, Petropar itself regards Paraguay's fiscal terms as uncompetitive, and remote access and long migration distances add to frontier risk. Outlook: Neutral.

Updated

October 8, 2026

Location

Description

The Chaco Basin lies beneath the Gran Chaco plain of northern Argentina, western Paraguay and south-eastern Bolivia, and forms the modern foreland of the Andes. It is bounded by the Sub-Andean fold-and-thrust belt to the west, the Brazilian Shield to the north-east, the Paraná Basin to the east, from which it is separated by the Asunción Arch along the Paraguay River, and the Pampean basins to the south; the Paraguayan sector alone covers about 247,000 km². A Palaeozoic marine succession of shales, sandstones and carbonates (to the Lower Permian) is overlain by Late Jurassic–Early Eocene continental clastics and volcanics in the Cretaceous Pirity and Pilar rift sub-basins, and by thick Cenozoic Andean foreland sediments. Silurian–Devonian marine shales and Upper Cretaceous shales and carbonates are the main source rocks, with Carboniferous channel sandstones, Devonian sandstones and Cretaceous volcanic and clastic units the principal reservoir targets.

Summary

More than 50 wells have been drilled in the Paraguayan Chaco since the 1940s without a commercial discovery, although President Energy's 2014 Lapacho well in the Pirity Sub-basin found oil in the Lower Devonian and gas in the Silurian. Its successor, Molecular Energies, spudded Tapir x-1 on the Pirity Concession in January 2024, targeting a prospect complex of over 260 MMboe (Pmean unrisked), but the well was suspended short of target in March 2024 owing to drilling difficulties and then abandoned, and the company signalled it would probably exit Paraguay. State-owned Petropar holds six Chaco blocks covering more than 6.1 million ha, none yet drilled; in October 2026 it was preparing a US$837,566 tender for a consultancy to rework its Open Round terms, and in September 2026 it signed an MoU with Scorpion Oil & Gas to assess future exploration. On the Argentine side, the adjoining Palmar Largo field in western Formosa (over 57 MMbbl produced since 1983) is being revived by provincial REFSA Hidrocarburos through workovers.