In the midst of the shortage of dollars caused by the drought, the energy sector, which required a strong demand for foreign currency in 2022 due to the war in Ukraine, this year will bring relief to the Central Bank. Only in the first seven months, energy imports fell by $3.5 billion compared to the same period of the previous year. This 2023, the energy trade balancewhich is the difference between exports and imports, will close in equilibrium, and by 2024 it is expected to have a strong surplusa fact that has not happened for more than a decade.
This is clear from the monthly report of the consulting firm Economía y Energía, directed by the economist Nicolás Arceo. In the period January-July 2022, after the war in Ukraine triggered the price of energy internationally, fuel imports had climbed to $9,087 million. This year, in the same period, imports were for US$5,514 million.
Regarding the reasons for the drop in imports, the consultant highlights: “The decrease in international prices of energy products, the improvement in hydro generation and imports of electricity from Brazil were decisive in this process.” Regarding the composition of imports, the greatest decrease occurred in the case of diesel: in the first seven months of 2022 they had been US$3,422 million, while this year they were US$1,509 million.
“The contraction of more than US$1.9 billion in diesel imports is explained by the lower thermal dispatch, the replacement of diesel by LNG due to the change in relative prices between these products, and by the drop in domestic demand as a consequence of the drought that affected the agricultural sector”, details Economy and Energy.
As for exports, they had a slight drop. In the first seven months of last year, energy exports had been US$4,519 million, while this year they have fallen to US$4,385 million. Regarding the reasons, the consultant states: “The reduction of US$134 million is as a consequence of the decrease in international prices. The volume of oil exports increased by 27%, but their total value fell by 4% due to the contraction experienced by international prices”.
Energy balance, in balance
For all of 2023, Economy and Energy estimates that imports will amount to US$7,064 million, almost half that of the previous year. They reach this number as a result of the fact that Enarsa has already carried out all the tenders for the purchase of LNG vessels for this year, where 44 vessels were awarded, although four shipments scheduled for the months of July and August were not finally purchased, due to the high temperatures in the winter.
Regarding exports, the consulting firm’s projection is that they will end in all of 2023 at US$6,794 million. This would be 20% less than last year, since although foreign sales of oil and gas increased, there was a strong reduction in international prices.
In this way, Economía y Energía anticipates that 2023 will end with a “practically balanced” energy trade balance, which will mean that the deficit of US$4,349 million of 2022 will be reversed. lead the next government “If the expansive trend in hydrocarbon production continues, during 2024 the sectoral trade balance should reach a significant surplus, breaking more than a decade of a structurally deficient trade balance”says the job.
hydrocarbon expansion
The Ministry of Energy, which heads Flavia Royoncelebrated the latest hydrocarbon production data. In July, oil production reached 616.8 thousand barrels/day, an increase of 6.5% year-on-year. In the accumulated of the year, the increase in production amounts to 7.1%. “The first semester was the best since 2009,” said Royón. Only in the Neuquén Basin, production rose 13.3% year-on-year in the accumulated January-July.
In any case, from Economy and Energy they highlight the impact of the limitations on the transportation capacity for crude oil. “During 2022, the lack of crude oil transportation capacity from the Neuquén basin had limited production growth. It was expected that the reactivation of the Trasandino Pipeline (OTASA) and the possibility of exporting crude oil to Chile would allow a significant growth in production. The start of crude oil exports to Chile in May has not yet resulted in an increase in production levels, on the contrary, production has maintained a slightly downward trend since March of this year”.
Source: Ambito
