Juan José Carbajales: “Energy will provide solutions to the economy, and in previous years it was not like that”

Juan José Carbajales, Director of the Paspartú Consulting Firm and the Oil and Gas Institute (UBA) participating in the second panel on Energy and Mining of Scope of debate, titled “Analysis, challenges and opportunities of the energy industry” and moderated by Ámbito’s policy editor, Ariel Basile.

In this context, Carbajales highlighted that “Argentina has a relatively clean energy matrix at a global level” and compared that “it has already made the first transition, it has a great penetration of natural gas and the world does not have that, it is our particularity.”

The Paspartú representative stated that “The provision of natural resources such as gas, minerals and hydrogen allows the country to be a voice in areas of discussion” and pointed out “not only to continue diversifying its matrix, but in the fossil hydrocarbon sector there is much to be done in terms of efficiency and emissions control.”

“After that, it will give you the green label When you want to sell the products, because it will increase on a global scale, look at how you produce,” he said and added: “Achieving these ambitious goals requires a great deal of coordination between the public and private sectors. This government has a different view of what has been done, so there are many unknowns about how we are going to move forward because companies can have goals, but they have to be compatible with the country’s international commitments.”

The impact of RIGI on investments in the sector

When asked about the changes proposed by the Large Investment Incentive Regime (RIGI), Carbajales described it as “a great umbrella for many sectors of the economy” and highlighted that “Energy is one of the sectors that the government is paying close attention to in order to attract these investments.”

“It is an investment facilitator, many of which were in the portfolio and others were born in the light of this RIGI. You have two years to join, it is done by project and it is short term, with 40% of the investment in the first two years. So, we will soon see if this works or not and then it will mature little by little,” he reasoned.

On the other hand, Carbajales added that “in terms of the environment and productive development, these are the two pillars that were left somewhat weak in the RIGI, which does not mean that it cannot be complemented with other instruments later on” and recalled that “something that is missing and is not minor is that the province of Neuquén has not yet joined.”

He also indicated that “There are decisions that are groundbreaking, because we have a long tradition of first supplying local demand and today, thanks to the fact that there will be surpluses, the assumption is that we do not have to worry about the domestic market.” “But we are changing a rule that we have been accustomed to for decades,” he warned about the eventual adaptation, referring to the change of what “was the key piece of the entire framework.”

Vaca Muerta, costs and solutions

Along these lines, Carbajales pointed out that “Thanks to Vaca Muerta, which is not more than ten years old, today we explain half of the energy” He added: “If we didn’t have it, we would be in trouble because the decline is structural.” However, he admitted that “it could be an opportunity for new players to enter” the mature basins.

Regarding costs, the director of the Gas and Oil Institute considered that “There is a technological challenge in how we develop our own equipment” and added that “the RIGI will not be able to pull in that direction and other solutions will have to be found.”

In that vein, Carbajales defined: “In the coming years, energy will provide solutions for the economy, and in previous years this had not been the case. Within that big umbrella, I think the challenges are how we can unlock the potential and how we can continue to increase the green brand of that production.”