Page 11 - LatAmOil Week 14 2022

LatAmOil URUGUAY LatAmOil

ANCAP turns a profit in 2021 despite

government’s fuel price subsidies

URUGUAY’S national oil company (NOC) whole ANCAP group, with a contribution of
ANCAP said earlier this week that it had earned $25mn from related companies, but from com-
a profit of $88mn in 2021 despite the govern- petitive businesses. In the only business segment
ment’s decision to keep domestic pump prices where ANCAP is a monopoly, it lost money,”
artificially low. This marked an improvement on ANCAP’s president Alejandro Stipanicic was
2020, when ANCAP sustained losses of $12mn. quoted as saying by Mercopress.
In a statement, the NOC explained that He went on to express concern about his
Montevideo had effectively paid out $159mn company’s financial position in 2022, saying:
worth of subsidies last year after deciding to fix “ANCAP’s cash flow is getting leaner and leaner
fuel tariffs at end-2020 levels – that is, below the because international costs are rising, and in
import parity index set by the Energy and Water three months we will have to pay for the crude
Services Regulatory Unit (URSEA). This move we are receiving today, which will close in April
did benefit Uruguayan consumers, as it reduced with a reference price of $110 [per barrel].”
their exposure to shifts on world crude oil mar- Stipanicic also drew attention to the impact
kets, which were generally bullish in 2021. of government subsidies for LPG, which is
At the same time, this policy decision known locally as “supergas.” He conceded that
imposed some financial constraints on the com- Montevideo’s pricing policies had helped con-
pany by cutting off potential income streams. sumers pay $108mn less than the world market
Nevertheless, ANCAP overcame these con- price for LPG in 2021 but said that gas distrib-
straints because it was able to earn more from utors were demanding to renegotiate their con-
the sale of diesel to the National Administration tracts in light of the subsidies.
of Power Plants and Electric Transmissions “We have already talked with the companies
(UTE), the national power provider. (UTE, in in the sense that it is difficult for us to renew
turn, used the diesel to generate electricity for these contracts,” he commented, according to
export to Brazil, which has been short of power Mercopress. “These contracts are based on the
because of a drought that has strained its hydro- costs of another era.” ™
power resources.) Extra earnings from diesel
sales amounted to $56mn in 2021, the company
said.
ANCAP further stated that it had recorded
a loss of $32mn on Uruguay’s monopoly mar-
ket. These losses were more than compensated
by the company’s $41mn profit on the competi-
tive market, as well as the gains realised through
exchange rate hedges and the $25mn in contri-
butions made by subsidiary companies.
“The final line establishes $88mn for the ANCAP earned $56mn from extra diesel sales last year (Photo: ANCAP)

ARGENTINA
IEASA closer to starting work on Vaca

Muerta pipeline after receiving Tenaris bid

ARGENTINA is set to move forward with the steel pipes for the first phase of the project.
construction of a new pipeline for shale gas from The only company to submit an offer for the
the Vaca Muerta formation, as state-owned Inte- contract was the Luxembourg-based steel pipe
gración Energética SA (IEASA) did receive a bid maker Tenaris, an affiliate of the Argentini-
on March 31 for a contract to supply 656 km of an-Italian industrial conglomerate Techint.

Week 14 07•April•2022 www. NEWSBASE .com P11