Page 6 - LatAmOil Week 08 2021

LatAmOil COMMENTARY LatAmOil

Argentina is talking about resolving this efforts in Vaca Muerta, Gonzalez said he
dilemma through measures such as building expected Vaca Muerta gas production levels
a high-capacity gas pipeline to Brazil. Mont- to show modest signs of recovery in the short
gomery said, though, that he expected concerns term, following their 8.6% year-on-year decline
about Argentina’s financial stability to under- to 4.35 bcf (123.2 mcm) per day in 2020.
mine such projects. “I think it is fair to say we will not see, at
“It’s hard to get any pipeline built, certainly least from the gas side, a significant movement
in the near term. Again, it’s the cost, the capi- upwards,” he said. “But the production levels will
tal that’s needed,” he commented. “They have definitely be higher than what we have seen in
talked and planned new pipelines from the 2020, just because of the huge lack of investment
Neuquen Basin running north to Brazil, run- in gas last year and in part of 2019.”
ning to the coast, to the Buenos Aires market. Gonzalez also said he did not expect Argen-
Pipelines have been talked about for years and tina’s national oil company (NOC) YPF to spend
years. Nothing has happened. And I don’t see, the bulk of its proceeds from a proposed bond
certainly not in the near term, any reason why swap on Vaca Muerta gas development. The
that should change or why there should be any state-run company has made some extra funds
significant movement towards investment in a available by convincing holders of bonds due to
new pipeline. The country’s in a difficult place mature in March 2021 to roll over their holdings
economically right now.” for new securities with a later maturation date,
Anjos also talked about the need to serve he said, but it appears to be more focused on
both domestic and export markets – and pointed unconventional oil than on unconventional gas.
out that the political transition that took place “YPF’s 2021 investment plan allocates $2.1bn
in late 2019 had complicated matters. “To build to their upstream business, mostly focused on
a gas export pipeline to Brazil, what you need the Vaca Muerta. But the majority of the invest-
is a clear long-term gas pricing policy that will ment is actually going to be used in their shale oil
provide foreseeability for new supply in order projects – more specifically, to Loma Campana,
to grow total production. In addition, you need to La Amarga Chica and to Bandurria Sur,” he
the expansion of domestic pipelines too. All this told LatAmOil.
had progressed in 2019, but with the change of He also explained, though, that YPF was
administration, it was mothballed,” he said. likely to spend just enough on gas projects to
(He was referring to the fact that incumbent meet the domestic supply quotas set by the
President Mauricio Macri, a right-leaning figure government. “On the upside, there will also be
who mostly favoured market-driven solutions, a decent amount of investment, but it will only
lost his bid for re-election to Alberto Fernandez, be enough investment to keep up with the pro-
the representative of a more left-leaning and duction commitments agreed to in Plan Gas.
populist coalition, in late 2019). Ar,” he commented, referring to the package of
measures rolled out by Fernandez’s administra-
Production forecast tion last November to support the domestic gas
Despite all the roadblocks facing development industry. ™

MEXICO
Pemex to receive government stimulus

MEXICO’S government has announced plans
to offer additional fiscal support to Pemex, the
national oil company (NOC), in the form of a
stimulus package worth around $3.5bn.
The government unveiled its plans in a
statement published in the official gazette on
February 19. In that statement, it said that
it was making available a fiscal stimulus of
MXP73.28bn ($3.52bn). Pemex will use the
funds to shore up oil production levels and sta-
bilise its finances, the statement said.
Mexican authorities made this announce-
ment last week, around the same time that a Pemex may receive $14.7bn in state support this year (Photo: Pemex)
senior government official informed Reuters
that Pemex was slated to receive around $5bn Then on February 22, the same official told
worth of relief, including a tax break worth the news agency on condition of anonymity
about MXP75bn ($3.6bn) and a capital boost of that the stimulus plan published in the official
$1.3-1.6bn. gazette represented the tax break.

P6 www. NEWSBASE .com Week 08 25•February•2021