For businessmen, the free availability of foreign currency is one of the keys to promote the development of Vaca Muerta in the medium term, turn our country into an exporter of hydrocarbons and generate the funds that allow balancing the trade balance.
This was stated on December 12 by the president of the Argentine Institute of Gas and Oil (IAPG), Ernesto López Anadón, before some thousand industry representatives during the traditional lunch for Oil and Gas Day.
There, among businessmen and public officials, he opened the speeches to review the evolution of the 115 years of activity in Argentina together with the 100 that the YPF company celebrated this year.
YPF celebrated Oil and Gas Day, with a view to Vaca Muerta
The guest managed to bring forward December 13, the day on which the discovery of hydrocarbons in our country is remembered, due to the dispute between Argentina and Croatia for the World Cup, and Secondly, it featured a speech by the Secretary of Energy, Flavia Royón.
López Anadón began the act where he referred to the evolution of productivity and the incorporation of the diversity and gender agenda as the most relevant issues, to later demand “consistent policies” and in the long term for the sector.
The industry said: “It is today one of the most relevant sectors of the country’s economy.” “Hydrocarbons have become a huge export project. We can’t keep thinking about the past. Our future lies in an intensive and limitless development of these abundant resources,” declared the head of the agency.
The Minister of Energy, Flavia Royón, accompanied the celebration for Oil and Gas Day.
In conversation with IProfesional, the IAPG benchmark celebrated the productivity levels achieved this year by our country in terms of hydrocarbons and also asked for speed in granting the conditions that allow to accelerate the investments.
“2022 was significant like other years, because the industry has been working a lot on productivity for a long time and very important levels are being reached. Vaca Muerta has been transformed into one of the most efficient and productive basins in the world and that is what has allowed we have broken all the country’s global production records. We reached 650,000 barrels per day, which is a record for Argentina,” he affirmed when taking stock of the year that is ending.
Vaca Muerta’s productivity already exceeds wells in the United States
He was referring to studies such as the one carried out by the prestigious consulting firm McKinsey & Company, which points out that In 2021, the production of a well in Vaca Muerta was higher than that of one in the United States in its first 90 days, resulting in 82 thousand barrels in the Neuquén formation against 76 thousand that were generated in Delaware.
Likewise, this report remarked that, by increasing the potential of Vaca Muerta, production could double in the next five years and triple in the next ten, “potentially placing Argentina among the top 20 oil-exporting countries.”
This year, the training Vaca Muerta achieved the historical record of gas production in September with 91.59 million cubic meters per day. In this sense, the study indicates that it could increase to 150 Mmm3/d in the next five years and reach 180 Mmm3/d in the next ten years, “balancing Argentina’s dependence on imports”.
In this context, López Anadón agreed that the potential of Vaca Muerta allows us to project levels of gas and oil exports much higher than the current ones, but assured that investors do not have the necessary conditions to take that leap.
The president of IAPG believes in the potential of Vaca Muerta, although he called for better “conditions” for investors.
“Vaca Muerta has many resources that far exceed Argentine consumption. Today we are talking that it has a production close to 300,000 barrels per day, but it can produce a million barrels per day,” he said.
“If we continue at this rate of production, we are going to be left with resources underground without being able to take advantage of them for the country,” warned the engineer and then justified: “What I am preaching is that activity in Vaca Muerta triple and for this important conditions are required, consistent and permanent policies that allow the industry to work and triple activity”.
Release foreign currency to generate more investment in Vaca Muerta
The head of the IAPG criticized the implementation of decree 484/22 (which regulated 277/22), which regulates access to foreign currency for companies through their incremental production and stated that “what you have to think about is the following: the industry It makes the investments first, it has to bring in the foreign currency to do it long before the first cubic meter of exports leaves, so the flow of foreign currency will be positive for the country, that’s why It is important that the investor be guaranteed that he will be able to get something out of those debts that he is taking on and the interest or dividends”.
Within this framework, he maintained that these regulations set a limit to production and exports, lead to the reinvestment of only what is produced and that foreign companies do not disburse the money that would allow to achieve the massive development that Vaca Muerta needs.
On the other hand, he recalled that new gas and oil transportation and distribution networks still need to be finalized and that for this, it will be necessary to resort to the business community: “The Néstor Kirchner gas pipeline was made by the State, because there are no guarantees for investors. At the time when they did, it was in the ’90s, even though many people see it as something evil, it wasn’t because the private industry made all the investments and so distribution networks doubled, pipeline capacities and all the export gas pipelines that we have today were built,” he said.
Finally, López Anadón assured that these conditions can be replicated taking into account the reserves available in Vaca Muerta and that “the State will not be able to do it, because it does not have the money or the efficiency. That is why the conditions must be created so that The works are done by the private sector.