“The main destruction of the energy sector has been the macroeconomic situation and the dollar restriction, but the Government is trying to solve the underlying problems and not sell coloured mirrors of granting privileges when there are no dollars. I am optimistic that work is being done on the fundamental measures and we will be able to achieve the full potential of Vaca Muerta.”held.
The former CEO of YPF during the management of Mauricio Macri described that infrastructure developments in oil and gas progress is reasonable, but he warned that there are serious infrastructure difficulties in the electrical sector, in a context of paralysis of public works, due to the goal of maintaining a zero deficit. “It will not be solved from one year to the next. The private sector will have to do it,” He specified and added: “There have been many years of sustained lack of investment, and we are going to work to mitigate the effects in the short term.”
What will happen to electricity and gas rates?
González also said that by the end of the year the tariff will be reaching 80% and 90% of energy and ruled out for now the entry into force of a Basic Energy Basket (CBE), which the Government had promoted. “Next year’s starting point is much better, on average it will be substantially higher than this year.”
According to a recent report by the Encuentro Foundation, electricity rates for some families have seen increases of up to 600% by 2024. Despite starting the year with historically low energy prices in dollars, in July 2024, the cost of generation increased to 95.5 USD per MWh (higher than in July 2023, and higher than the average paid between 2013 and 2023), the report detailed.
Thus, the weight of payment for natural gas and electric power public services in relation to income for lower-income families went from 3.9% in November 2023 to 12.8% in August 2024.
However, For now, Gonzalez dismissed the application of the CBEwhich would take into account the minimum consumption necessary for the subsistence of different family groups, in different regions, months of the year and types of supply. “This is important: without fiscal discipline there is no sustainable macro, and without sustainable macro, there are no investments”said the new public official, former executive director of IDEA.
“A large part of the fiscal problem has to do with energy subsidies. It is very impressive how people have been supporting it. This is a cultural change that will take a long time, after decades of getting used to not paying for energy, but also for services. Things cost money.”he added from the Shell stage.
How much will the energy surplus be in 2024?
Daniel González stressed that this year Argentina will achieve an energy surplus of US$4,000 or US$5,000 million and predicted that by 2025 it will be double. “The potential is great, the main restriction has been the macro, the cepo. The Government is trying to solve the underlying problems and not sell colored mirrors. We will be able to see the concrete potential of Vaca Muerta”he said.
In this sense, he highlighted the role of unconventional hydrocarbons. Vaca Muerta, which they contribute “half” of the country’s total oil and gas. “It’s very impressive”said. González recently visited the Neuquén-based company together with President Javier Milei and a handful of businessmen from the sector. It was a cordial visit, where the executives committed to invest, in exchange for matching the benefits that the RIGI will grant with previous investments made in the mark of the Hydrocarbons Lawwhich will soon undergo modifications, according to what was learned Energy Report.
Daniel Gonzalez Jose Del Rio RIGI Shell
It’s that many businessmen complained about how low the Large Investment Incentive Regime (RIGI) that González will arbitrate benefits future disbursements, but does not take into account the history of “sinks” of dollars that companies have made in Vaca Muerta since 2008. There is talk of some US$50,000 million that did not have the new benefits and that are now waiting for compensation. González is working on it.
Why is Daniel González called “RIGI Man”?
From the August 28th and through the Decree 811/2024the graduate in Business Administration Daniel Cristian Gonzalez Casartelli He was appointed Secretary of Energy and Mining Coordination of the Ministry of Economy. This position puts him in charge of the RIGI Coordination Unitwhich will also include other Secretaries of State and which will be responsible for evaluating and approving investment projects that will be included in the benefits regime. Supported by his personal friend and colleague at Cardinal Newman, González will have the final say in every decision.
The other secretaries of the ““RIGI Unit” which will operate under the orbit of the Ministry of Economy are of Infrastructure, Production, Finance, Treasury, Legal and Administrative. “This Committee will have the objective of receiving the presentations, referring the submitted requests to the respective technical areas, monitoring the corresponding administrative procedure, keeping the individualized records up to date and interacting with the provinces and municipalities in relation to the matters related to the treatment of the RIGI”established the regulations.
He RIGI Project Evaluation Committee in charge of González will be issued through a Conclusive report that, based on the assessments carried out In the technical reports produced by the departments with technical competence in the matter, it will recommend the approval or rejection of applications for membership in the RIGI.
The “RIGI Man” and internal noises
According to at least three sources told this media, the appointment of the “RIGI Man” caused a stir within the energy cabinet, much more than in the mining cabinet. They fear that their expertise and the level of connection with the personalities of the sector overshadows the current work that is being done Eduardo Rodriguez Chirillowho also participated in the celebration of Shell’s 110th anniversary.
Between bites, a high-profile source put it bluntly: “Eduardo arrived in a car with a driver, entered through the underground parking lot, went up in a private elevator, spoke on stage and left. González entered via the escalator that leads to the street, like everyone else, greeted everyone he came across, including the journalists, spoke on stage, got off and continued chatting with everyone. See if Milei retweets the Secretary or Chirillo.” Gestures create forms, although they do not guarantee results.
Eduardo Rodriguez Chirillo Shell
In fact, at the Shell event, the new coordination secretary stressed that the RIGI will bring improvements to some sectors, such as oil, gas and mining, although he clarified that it is not so easy to put a number on the volume of investments that are coming. In the Cabinet Office they talked about US$47.00 million for all the projects. Rodríguez Chirillo estimated that the RIGI will spend around US$2.5 billion in energy alone in 2025 and another US$2 billion in 2026.
Beyond the YPF and Petronas LNG plantGonzález is focusing on mining. And many businessmen are waiting for him with bated breath. “Lithium is a reality, there is a huge amount of investment in progress. Another opportunity is copper, which is huge, it’s like when we looked at Vaca Muerta 10 years ago. I wouldn’t put numbers on the dollars that will come.”but there will surely be many, he said.
Source: Ambito
