"Vaca Muerta must produce dollars" – Economy

Starting in the month of October, Argentina will have taken a big step forward in its efforts to strengthen its foreign trade and earn the money it so badly needs to alleviate the budget deficit. The unconventional gas export from the Neuquén site to Vaca Muerta to Chile will become a reality in a few months, in an operation that, auspicious, does not stop generating uncertainty.

stay in time and produce the necessary currency. We go through the badembly of the infrastructure necessary for the export of the fluid; another is not less because of the possibility that companies manage to market the product with international market prices, which are lower than those paid by Argentina, state subsidies through.

This is the main challenge for the export is viable, repeats relentlessly the engineer Jorge Lapeña, former Secretary of Energy of the Nation. Perhaps the deep and historical political divergences between Chile and Bolivia – a major regional gas supplier – that would make China a near-captive customer of Argentina

– What is your vision of gas sales ? unconventional in Chile

– I think it is correct and that it will help the development and production of unconventional gas Vaca Muerta. What I believe is that it will have to be an export respecting the conditions of sale of the Chilean market competition, the selling price will not be set internally, but it will have to compete with different energy alternatives .

-51% of The Argentine gas is extracted from the province of Neuquén. Are there other regions with gas potential?

– The field of Vaca Muerta is the most important. The unconventional resources, according to the estimates of the studies made for the United States, are rather scattered in various accounts across the country, but the most promising is that of Neuquén, in the area of ​​Vaca Muerta. It is logical that the highest production comes from this basin which was already concentrated, explored and now being exploited.

-There is a long time that we talk about this unconventional deposit. Is it starting to pay off on schedule?

-It is starting to bear fruit now as it is evident that about 10% of Argentine oil comes from there, from Vaca Muerta. In addition, it is an expanding depot. We are all looking forward to increasing oil production in an important way. This is relevant because Vaca Muerta has to produce what Argentina needs, which are dollars from foreign trade. It is essential that President Mauricio Macri calls for an increase in unconventional oil production in this area. It is important that oil and gas have an export destination and that this be done without any kind of subsidy to private companies. In this aspect we all want it to be a successful business.

– Is there a real dimension of Vaca Muerta's potential?

– For now these are resources, and these resources are not known precisely. to be considered as proven reserves. To the extent that they are resources, we know they are, but we do not know the quantities. It is still undetermined. I also highlight the challenge of the oil sector in terms of capacity to produce at international prices. This is the challenge of all Argentines, to convince themselves that this can be achieved. What is missing is whether Vaca Muerta will be able to compete in the global market with prices that govern the international market and which will prevail for the next 5, 10 or 15 years. The local market price is much higher

INVERSION

– Which sets the tone in terms of investment?

-The investment is in the hands of private industry, international companies Obviously, YPF also has a key role, which is a company with 51% of the stake in the hands of the company. ;State. It's a big company that has faced gigantic challenges in the past. YPF is the largest producer of unconventional gas in Argentina. Let's see now if Argentina can meet this challenge of supplying gas to other countries and earning dollars, so that we no longer have to ask the IMF as we have done now. We all want success, but today gas production is still subsidized by the state.

– The lack of infrastructure is the Achilles heel of this unconventional resource exploitation system.

the following: the oil industry will have to provide logistics infrastructure and infrastructure to make specific exports to the ports that need to be made. When we talk about the oil industry, it talks about the upstream, that is, sinks, pipelines, the rail system to transport the extracted resources, the storage and the ports. All of this is part of the investment that needs to be finalized to export significant amounts of gas and crude oil. We do not expect that to be done by the state. The oil company is a thriving industry. In Argentina, there are many industries that have problems, but we never know that oil companies are losing money. When it comes to extending the infrastructure, something that is needed, the worst thing they can do is to request that the works be developed by the state.

-Help industry reduce technology import tariffs to exploit unconventional resources?

– That seems like a reasonable thing. If it is necessary to mobilize a wealth to import, it seems good to me. It is logical that these tariff aids are for a time competitive

CHALLENGE

– The big challenge is therefore that the state stops subsidizing the private oil companies?

– It seems good to me that the gas be exported to Chile during the period of low consumption of this resource on the Argentine market. Currently, Vaca Muerta's gas production is totally subsidized. This grant represents a significant contribution from the National Treasury at a time when Argentina has made international commitments to reduce the budget deficit. Subsidies are regulated by Ministry of Energy Regulation 46, but they are a transitional instrument allowing the industry to receive adequate training, achieve economies of scale and efficiency. have competitive costs. Argentina's big challenge is to produce significant amounts of natural gas and export them to international prices, lower than those of the local market, to earn the dollars that are missing from the state. We are facing this transcendent challenge and I am not sure that this challenge at this time is fully badumed by the private oil sector under the conditions of economic competition. It's a hope we all have, we'll see if we can make the productive leap to generate more dollars.

-Gates have an expiry date?

-They were signed until 2020. From then on there will be no more subsidies for the oil companies They will have to be competitive on the international market to export the gas, or the product must stay in Argentina.

I notice a certain skepticism.

"I am not skeptical but realistic. The unconventional oil and gas production of Vaca Muerta is now a subsidized production