Argentina reduces energy subsidies, calls for fresh investment (updated)

Nabors Industries

12/09/2024 16:51

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      Argentina sees rising energy activity in Vaca Muerta
    

        * 
      Nabors Industries to provide new drilling rig for
Tecpetrol
    

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      LNG projects under consideration would cost $55 billion  
    

  
 (Adds Argentina oil activity on rise, talks with pipeline
operator Energy Transfer ongoing in paragraphs 4-9)
    By Marianna Parraga and Eliana Raszewski
       HOUSTON/BUENOS AIRES, Sept 12 (Reuters) - Argentina
reduced its energy subsidies in the first seven months of the
year by $2.7 billion, Energy Secretary Eduardo Rodriguez
Chirillo said on Thursday, as part of a goal to curb the
government's fiscal deficit while also working to promote
investment in the energy sector.    
    The South American country aims to advance an ambitious
reform package that includes guarantees for large investments, a
new hydrocarbon law, and changes to its foreign exchange system
aimed at securing dividend repatriations for foreign investors,
all part of President Javier Milei's move to secure capital. 
    Rodriguez Chirillo told businessmen in Houston that
Argentina achieved an energy trade balance surplus of $2.9
billion between January and July, a change from deficits in
previous years.
        "Our mission in the new model is that the investor can
design his own model ... and knows that he has the right to
export," said Rodriguez Chirillo.
  
        The governor of Neuquen province, home to the nation's
giant Vaca Muerta shale oil and gas reserves, said at the
meeting that Argentina must quickly move away from foreign
exchange controls to attract oil and gas investment. 
  
        "We can multiply by six the (oil and gas) production we
can offer to the world," Governor Rolando Figueroa said, adding
that clear rules, a new legal framework and a good
administration of resources are essential to achieve output
goals.
  

    PROGRESSING
    In a sign of a new wave of investment starting, oil and gas
producers are announcing output expansions, midstream projects
including terminals and key pipelines for exports, and the
arrival of much-expected drilling equipment, officials said.
        "A lot of capital is needed," Marin said. "For liquefied
natural gas (LNG), $55 billion are required."  
  
    An oil pipeline YPF is building from the Vaca Muerta shale
region will have capacity of 350,000 barrels per day next year,
and greater than 700,000 bpd in 2028 once a second phase is
completed, expanding the nation's crude export capacity, Marin
said.
    YPF is in talks with U.S. pipeline giant Energy Transfer
 ET.N  about becoming the operator, Marin added. A spokesperson
for Energy Transfer did not reply to a request for comment.
        Pluspetrol is interested in participating in LNG
projects in Argentina, where the Vaca Muerta formation is
located, said Julian Escuder, the company's country manager.  
  
        At least two large projects to produce and export LNG in
Argentina are under discussion: one involving Malaysia's
Petronas  PETRA.UL  to build floating LNG plants, and another by
Tecpetrol that could include modular onshore facilities.
  
        Pluspetrol plans to drill up to 25 wells per year in
Vaca Muerta between 2025 and 2029, Escuder said.
  
        U.S. driller Nabors Industries is supplying a drilling
rig for work in Vaca Muerta's Fortin de Piedra area, Tecpetrol
CEO Rocardo Markous said at the meeting.
  
        
  

 (Reporting by Marianna Parraga in Houston and Eliana Raszewski
in Buenos Aires; Editing by Adam Jourdan and Alistair Bell)
 ((marianna.parraga@thomsonreuters.com; +1 713 371 7559; Reuters
Messaging: @mariannaparraga))