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Vaca Muerta: oil companies say they do not need subsidies, but require clear rules and remove barriers to exports



(Special Envoy to Neuquén) "We use less than 4% of Vaca Muerta's surface, we just finished kindergarten and we went to first class, it just starts," said energy secretary, Gustavo Lopetegui, during his presentation at IDEA precoloy held at the casino hotel in the town of Neuquén.

Businessmen, officials, union members and analysts all agree that the potential of the unconventional oil and gas field is enormous and that there are many challenges that the various players have to face.

Four months before the presidential election and with two political forces that have completely opposite country visions, oil companies exploited the need to have clear rules of the game, eliminate obstacles and move forward with the development of the necessary infrastructure to continue developing the account. In summary, the CEO of Pan American Energy, Marcos Bulgheroni; and the presidents of YPF, Miguel Ángel Gutiérrez, and Tecpetrol, Carlos Ormachea, ensured that the sector does not need subsidies.

"We have already covered the most complicated part. If we look forward to it, Vaca Muerta must develop without a contribution, but also without any obstacles. Vaca Muerta must be developed without pins in the wheel to be able to compete on equal terms with the same rules as other energy sources, says CEO of the oil company Techint Group.

"We do not need subsidies," shot the YPF president and continued: "Industry should decide where and how to invest, but it does not need subsidies, which does not mean that we do not need to rationalize taxes. We must be able to export to the values ​​that the market requires".

Asked what the sector is asking the various candidates for the president, Bulgheroni said that "the industry is talking to politics," but that he would like to "look at the deposits". "Because you are sitting at a desk is very simple, but you can't understand everything. Go to Vaca Muerta, because when they change a rule at least they will do it with a little more knowledge and more care, "he said.

Excessive in the environment the annoying with the controversial resolution 46, through which Tecpetrol began a trial of the state. The government promoted subsidies for the production of unconventional gas and then, according to the company, modified the game rules by wanting to pay them for the originally calculated production and not for what was finally produced.

He also referred to the need for greater transparency and fewer obstacles to produce in Vaca Muerta, the president of Equinor Argentina, Nidia Alvarez Crogh, which featured in a previous panel along with their ExxonMobil comrades, Daniel de Nigris; and Sean Rooney, from Shell Argentina. According to executive, "presenting barriers to exports hinders progress." "Predictability is very important because it gives us the confidence to invest", he pointed out. They referred to the retention that the government introduced for all exports, and for the oil sector today it constitutes 9%.

When his turn came, he shared a panel with economist and adviser to Kirchner, Guillermo Nielsenand the union Guillermo PereyraLopetegui reviewed the progress of the energy balance achieved in recent years and stated that the state would contribute to the development of infrastructure and reduce the cost of capital. "The best thing we can do is correct it, and we will do it to the extent we correct the macro economy," the official said.

The figures outlined by Lopetegui look resounding: in just seven years – he clarified – "the economy was deprived of $ 13,000 million, which was less investment and less employment and just because of poor policy".

In addition, only energy subsidies accounted for 3.5% of GDP. Today, the red falls to 1.2 points from the product and to lower the energy balance deficit to 20100 million dollars in 2018, this year we are heading towards equilibrium. "We normalize these two self-administered anomalies," Lopetegui said.

Nielsen agreed that Argentina has the opportunity to develop another moist pampa in Vaca Muerta and that this will make it easier to pay off the debt. According to the financial adviser of the presidential candidate for citizenship, Alberto Fernández, Space works to present the provinces a new regulatory framework for Vaca Muerta that provides equality with tax and regulatory conditions with training of Shale American Permian and Marcellus. "We are working to mitigate the Argentine risk that applies to all Vaca Muerta projects," Nielsen stated., by stating that the initiative concerns analysis of 24 dimensions of competitiveness to match the United States formations.

"Hopefully, one of the dimensions that Nielsen said is to keep capitalism, maybe capitalism is trying to see what is happening, not bad, right?" And the former finance secretary expected his turn to answer him. "I would like to convey calm about the capitalist vision because it is true that many mistakes have been made in Argentina."


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