For the Financial Times: “Global energy turbulence offers Vaca Muerta a new opportunity”

“May the European Union ban this week on most Russian oil imports to give new life to a dead cow in Patagonia? The question is the trigger for Michael Stott’s opinion column that was published in Friday’s edition

As described by the FT, “this is what Argentina’s president Alberto Fernández believes. He is talking about the potential of the second largest unconventional gas field in the world and its fourth oil reserve. to fill the void left by the growing Western embargo on Russian energy. “He adds:” Argentina, he told his German guests during his visit to Berlin last month, is a ‘reserve what the world needs right now: food and energy’ “.

The publication highlights that Chevron, Petrobas and Shell will be among the international companies that will benefit if the Vaca Muerta oil development finally takes off. “Gas production can do Argentina a rival of Australia and Qatar in the LNG market at a time when demand is growing, ”according to a recent S&P report.

For the FT there is a surface inconvenience to the past decisions of the Argentine government. “Years of hype about Vaca Muerta and its fascinating geology have not been accompanied by sufficiently enticing official policies.under the previous government of Mauricio Macri or until now the current Peronist, to attract the tens of billions of dollars of investment needed, “he says.

On the timeline, the Financial Times warns that Vaca Muerta “has been in development for a decade and, despite production costs having dropped to levels close to those of US unconventional gas, less than 10% of the surface is used “. “However, the government says that if 50% of Vaca Muerta’s assets were put on the market, Argentina would generate more than $ 30 billion a year in additional export revenue,” he warns.

In this regard, the American newspaper asks: “Why didn’t it happen?”and answer: “A big culprit is Argentina’s tight foreign exchange controlwhich prevents repatriation of profits. “However, he acknowledges that” after years of lobbying, the government has just agreed to allow oil and gas companies to convert the revenue of some of their additional production into dollars, but this is far beyond under the freedom enjoyed almost everywhere “.

Another drawback highlighted by the publication is “Argentina’s long-standing fixation on fuel subsidies.”

Finally, for the FT, “Argentina needs more energy infrastructure” because, as described, the gas production at Vaca Muerta is limited by the capacity of the existing pipelines.

“As the stampede from Russia leads to a redesign of the global energy map, the Argentine government must move faster and more boldly if the companies that held Vaca Muerta are to be awarded a bronco instead of a lethargic cow.” he concludes.

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