Page 4 - LatAmOil Week 43 2019

LatAmOil COMMENTARY LatAmOil
President-elect Alberto Fernandez (right) and Vice President-elect Cristina Fernandez de Kirchner (left). Photo: Mercopress
What are Vaca Muerta’s prospects under Argentina’s new president?
Fernandez is less market-oriented than his predecessor, but he is probably not keen to alienate the private companies that can facilitate the development of unconventional oil and gas
WHAT:
Incumbent Mauricio Macri, who valued oil and gas investment, lost the presidency to the head of a left-leaning party.
WHY:
Production from Vaca Muerta could help Buenos Aires amass the funds
it needs to address its economic challenges.
WHAT NEXT:
Fernandez is likely to seek a bigger role for YPF in Vaca Muerta projects.
UNDER the administration of President Mau- ricio Macri, Argentina’s oil and gas sector has made significant strides forward. Foreign inves- tors and the national oil company (NOC) YPF have made significant progress with respect to the exploration and development of the Vaca Muerta shale basin.
As a result, the country has become a net exporter of natural gas for the first time since 2008. It is also on the way to becoming a net exporter of oil next year – assuming, of course, that development work continues at Vaca Muerta fields.
A new president-elect
There is little reason to believe that invest- ment in the shale fields will dry up in the near term, even though Macri, whose right-leaning, market-friendly administration strove to create a welcoming environment for investors, did not
win re-election on October 27.
As expected, the incumbent president lost
to Alberto Fernandez, who is now due to take office on December 10. The outcome of the vote is certain to have an impact on Argentina’s economy. Fernandez is the leader of the coali- tion known as the Frente de Todos, which leans more to the left than Macri.
The coalition last held power from 2003 to
2015. During that period, it sought to increase
the state’s hold over the economy through meas-
ures such as price controls, currency controls,
trade controls and capital controls. These initia-
tives had a generally negative effect on Argenti-
na’s oil and gas sector. They led to fuel shortages,
a rise in oil and gas imports and a decline in domestic hydrocarbon production – especially during the period between 2008 and 2015, when
the presidency was held by Cristina Fernandez
de Kirchner. 
P4
w w w . N E W S B A S E . c o m Week 43 31•October•2019