Argentina looks to stop light crude imports, boost domestic refining
HOUSTON (Reuters) - Argentina aims to stop importing light
crude this year and improve domestic refining operations as it moves further
down the road toward energy self-sufficiency, Energy Minister Juan Jose
Aranguren said.
Operators working in Argentina will continue to export oil,
mostly Escalante heavy crude, he told reporters on the sidelines of an industry
conference in Houston.
But more refining of domestic light crudes and larger and
more regular gas supplies from Bolivia would help the South American country
cut imports of costly liquefied natural gas (LNG), gasoil and crude.
The Argentine government is in talks with local refineries,
encouraging them to buy more domestic light crude and import less, after a
200-Mbbl cargo of a rare light crude was exported last month to drain
inventories that were not bought by state-run oil firm YPF, he said.
"Locally produced crude should be given priority in
order to avoid a reduction in jobs and tax revenue," Aranguren said.
"The domestic price goes from $55/bbl to $67.50/bbl depending on the crude
type, which means it would be convenient to sell production in the domestic
market."
President Mauricio Macri promises to increase investment in
the oil sector, particularly in renewable energy and the sprawling Vaca Muerta
shale formation in Patagonia, as part of his campaign to reverse Argentina's
status as a net oil importer.
Argentina has been running an energy deficit since 2011,
draining foreign exchange reserves.
But in a low oil price environment, foreign companies are
uncertain that Vaca Muerta will be profitable and have been focusing on
reducing drilling costs, executives said.
Macri was elected in November on a platform of eliminating
currency and trade controls in a bid to increase investment. His election
followed eight years of interventionist policies under previous leader Cristina
Fernandez, who nationalized YPF in 2012.
"The country disconnected itself from the international
market and lost its competitiveness," the minister said.
In five or six years, Aranguren said, Argentina should be
able to stop importing LNG, only preserving gas imports from Bolivia contracted
to 2027, while limiting gasoil purchases for the winter season.
Argentina will hold a tender next week for 1,000 MW of
renewable energy, part of the plan to install 10,000 MW of new cleaner power
capacity by 2025, Aranguren said. He expects investment of some $2.1 B for the
first phase.
(Writing by Marianna
Parraga, Hugh Bronstein and Anthony Esposito; Editing by Cynthia Osterman and
Tom Brown)
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