Argentina's latest oil discovery is the biggest yet in the Latin America and puts the country's southern Patagonia region on the map as a potential new energy hub on the continent.
Recent economic growth, mostly fueled by commodities exports, has propelled increased activity in both business and industry and given consumers more spending power and hunger for electricity-intensive lifestyle. But falling oil production has been a recurring theme in government pronouncements on Argentina's future energy strategies.
Argentina is also building a third nuclear power station to feed into the national grid and has plans to build another two over the next decade.
The discovery of hydrocarbon deposits of 927 million barrels of oil equivalent was made by YPF, the Argentine company owned by Spain's Repsol YPF S.A.
The find at YPF Loma La Lata property in the southern Neuquen province would help make up the shortfall in Argentina's oil production and also encourage more investors to become involved in the country's energy industry, analysts said.
However, government intervention has discouraged investors in the past. YPF's crude production over the past three years has dropped to 107 million barrels in 2010 from 111 million a year earlier and 115 million in 2008.
Rising fuel imports were behind earlier government pronouncements about stepped up exploration and more dependence on nuclear power, contrary to international trends since the Fukushima disaster in March.
YPF began exploring and developing unconventional energy resources in Argentina in 2007 and made known its first findings last year with a shale gas discovery at Loma La Lata, about 746 miles southwest of Buenos Aires.
Argentine President Cristina Fernandez de Kirchner said the latest oil discovery boosted Argentina's total reserves by about 6 percent.
Argentina's proved petroleum reserves are known to exceed 2.62 billion barrels of oil equivalent.
A U.S. Department of Energy report showed that Argentine natural gas reserves trapped in shale rock could exceed all of European reserves of shale hydrocarbons and make a significant impact on Latin America's energy scene.
Shale oil is a sedimentary rock that contains a solid mixture of organic chemical compounds that yield liquid hydrocarbons. However, extracting shale oil from oil shale is costlier than the production of conventional crude oil.
Shale oil extraction is also controversial because of its impact on the environment, water consumption, and waste disposal, greenhouse-gas emissions and air pollution.
Shale oil development is in various stages of development in both Canada and the United States. Brazil, China, Estonia, Germany, Israel and Russia have moved ahead with exploiting shale oil.