Page 8 - LatAmOil Week 41 2019

LatAmOil ARGENTINA LatAmOil
Argentina’s opposition candidate urged
to use energy prices as policy instruments
ADVISORS to Alberto Fernandez, Argenti- na’s opposition candidate for president, have suggested using energy tariffs and fuel prices as instruments to rein in price increases and encourage economic growth.
The advisors, who are affiliated with the Per- onist Party, a member of Fernandez’s left-lean- ing Frente de Todos coalition, said last week that the candidate’s economic policy platform should include provisions for freezing natural gas and electricity tariffs at current levels. In a report published on October 9, they argued that such measures would help mitigate inflation rates, which are now averaging 55% per year. They also pointed out that a rate freeze would bene- fit many citizens, noting that more than 35% of Argentina’s population is currently living below the poverty line.
Additionally, the advisors also recommended that Fernandez link petroleum product prices to the Argentinian peso, rather than to the US dol- lar. Since most of Argentina’s fuel consumption comes from domestic sources, they said, there is no reason to peg prices to a foreign currency. “There is no reason why consumers should pay the same value that is paid in countries that do
not have resources,” they wrote in the report. They also called for changes in Argentina’s oil and gas investment policy, saying that if Fernandez wins the election on October 27, he ought to take steps to ensure a leading role for the national oil company (NOC) YPF. Specifi- cally, they said that YPF ought to be “the main player” in the development of the Vaca Muerta
shale formation.
Vaca Muerta is the country’s most promising
oil and gas province, and much of it has yet to be developed. Both Fernandez and his opponent, the incumbent Mauricio Macri, have said they support plans to develop the formation and use it as a means of boosting domestic oil and gas production.
As of press time, the candidate had not responded publicly to his advisors’ proposals.
Fernandez is widely expected to win the elec- tion later this month. If he does, his approach to the energy sector is likely to differ from that of Macri, who favours market-driven policies. As a result, the report has generated some con- cern among energy industry observers about the potential impact on investment in upstream development projects. ™
Falklands projects draw criticism
ARGENTINA’S Foreign Ministry has issued a statement criticising three oil and gas companies over their operations off the coast of the Falk- land Islands in the South Atlantic Ocean.
In the statement, the ministry noted that Argos Resources, Premier Oil and Rockhopper Exploration had been looking for hydrocar- bons at two offshore blocks within the North Falkland Basin. It said the operators had begun work without first securing permission from the Argentinian government and reiterated Buenos Aires’ claim to sovereignty over the Falklands.
“The Malvinas [Falkland], South Georgian and South Sandwich Islands and the surround- ing maritime spaces constitute an integral part of Argentina’s national territory and are the sub- ject of a dispute over sovereignty between our country and the United Kingdom, as recognised under the UN General Assembly’s Resolution 2065(XX),”itsaid.
The statement declared that companies oper- ating in the areas under dispute and were in vio- lation of international law. Additionally, it urged other parties to refrain from providing financial support to or taking part in such operations.
As of press time, none of the firms named in the statement had responded to the ministry.
The Falklands are under UK control, and nearly all of the islands’ residents have expressed the wish to preserve their current status.
The Foreign Ministry issued its statement just a few weeks after Premier Oil and Rockhop- per said they hoped to make a final investment decision (FID) on developing the oil they had found at the offshore Sea Lion block within the next year, assuming they could secure funding for their $1.8bn development programme.
Premier Oil and Rockhopper hope to achieve first oil about three and a half years after FID. They will use a floating production, storage and off-loading (FPSO) vessel to extract crude from Sea Lion. The first phase of the block contains about 250mn barrels and may eventually yield 85,000 barrels per day (bpd). Rockhopper has a 40% stake in the project, while Premier Oil owns the remaining 60% and also serves as operator.
Argos Resources, meanwhile, owns a 100% stake in PL001, a licence area adjacent to Sea Lion. It has said it intends to look for a partner in the project.
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w w w . N E W S B A S E . c o m Week 40 10•October•2019