Iguacel: “In 2019 there will be no deficit in the energy balance”

After the twists and turns with the frustrated rise in gas tariffs, the energy secretary, Javier Iguacel, celebrated the first exports of that fluid to Chile, interrupted in 2007 by the energy crisis. In a dialogue with the Economist, the official remarked on the improvement in activity, especially in Vaca Muerta, and predicted that next year “Argentina will have a neutral energy balance”, for the first time in 9 years.

Argentina lost self-sufficiency in 2011, which produced an initial deficit of US $ 3.1 billion. In September, according to the INDEC, fuel and energy exports increased 122% with respect to the same month of the previous year, which reduced the year-on-year deficit from US $ 243 million to US $ 108 million. The gradual increase in local production cushions the outflow of dollars, although the question remains: is the September registration a definitive trend?

-The growth is sustainable, especially due to the results of Vaca Muerta. Gas production rose 260% and oil production 60%. What happened in September? We import less gas than last year, we had the first exports to Chile, and we reduced the imports of light oil. Our projection is that it should continue to increase gas production, as well as exports. There are already four companies authorized to do so and many others that requested it.

-This year will close with deficit. What is the projection for 2019?

-The next year we will have a balanced balance. There will be a neutral balance between exports and imports, but not in a uniform way. In the winter months gas consumption increases, but the balance throughout the year will be neutral.

-You said that in five years Argentina will export energy for US $ 15,000 million. Do you think there are more possibilities with gas or with oil?

-Principally oil, because the price is more expensive and the infrastructure to export is simpler. In the case of gas, the liquefaction process is required. It is an ambitious forecast, but it is possible to double production in the next five years. We are working hard, at the Vaca Muerta table, with the provinces, to eliminate bottlenecks.

-What are the priorities for the Government in your area?

-The priorities for the next 5 years are two. Oil, because the value per unit is more expensive and is what is generated more quickly. In 2028, within 10 years, we could generate US $ 35,000 million in exports. But the weight of the gas is bigger and it is a critical asset. In an abundant resource and its price at the international level is the most economic in the world. Now, to achieve export to all markets, the price would have to rise to US $ 10 million BTU, but today is at US $ 3.80. It is difficult to see it on the ballot, because it is compared to subsidized costs. But the possibility of exporting gas generates an increase in supply, lower prices than international ones and without subsidies.

-When can the price drop in the invoice be observed?

-If we did not have abundance of gas in the country, the increases would have been greater. It is difficult to understand because there was a devaluation and there are no subsidies. However, over time (in two or three years) the price could continue to fall little by little, but it will depend on the exchange rate.

-The specialists note that to export gas, liquefaction plants are required. What projects are there in sight?

-There is an announcement about a memorandum of understanding between TGS (Transportadora de Gas del Sur) and Excelerate to evaluate the possibility of setting up a plant in Bahía Blanca. There is another company (alludes to YPF) to bring a regasification boat. That is to say that where there was a ship to import gas now it is wanted to use it to export. These two short-term projects, in principle, represent 10% of our objective.

-In electricity generation, Argentina is self-sufficient. Are there possibilities to sell abroad?

– Two weeks ago we exported electricity for 15 days to Brazil. And just as with gas, it was specified at much more profitable values. What we are working with Chile is on a binational agreement for the laying of an electrical connection.

– When talking about profitability refers to local prices?

-The gas export prices are between 10 and 15% higher than in the Argentine market. But to guarantee the service, it was established that the priority is local consumption, which is why it is interruptible. As it was done with Chile.