The much-heralded Vaca Muerta shale patch may spur Argentina to export half a million barrels of crude a day in four years, if only politicians can provide clearer rules for drillers, according to Vista Energy CEO Miguel Galuccio
“What we need is to create a macroeconomic and political energy framework that allows us to fully develop our resources,” Galuccio told Bloomberg TV on Monday. “That’s why I would focus on two things: currency controls and clearer domestic crude prices.”
As head of Argentina’s state-owned YPF SA from 2012 to 2015, Galuccio was the architect of the first forays into Vaca Muerta, convincing Chevron Corp. and others to take risks in joint ventures when the country was an investor pariah feared by a volatile government. interventionism
While great progress has been made since then, with oil and shale gas now flowing, some of the erratic policies have not changed, holding back investment.
A patchwork of currency controls, designed to defend the Argentine peso, make it difficult for drillers to get the US dollars they need to import equipment or send money to investors. Unpredictable caps on local fuel prices to protect consumers also hurt oil producers’ profits.
Vista’s New York-traded shares, which have more than doubled in the past year, fell about 1% in early trading.
Argentina will vote in presidential elections at the end of the year. Galuccio believes all potential candidates would support Vaca Muerta to tap into its desperately needed export revenue at the cash-strapped central bank.
“The importance of Vaca Muerta for the country is not under debate between the different political parties,” Galuccio said.
–With the help of Haidi Lun.
