AGENDA ECONOMICA- Emilio Apud is an Industrial Engineer, Former Secretary of Energy of the Nation and Member of the Academic Council of the Libertad y Progreso Foundation. A few days ago he spoke with AGENDA ECONOMICA, about the post-pandemic energy reality; What role will Vaca Muerta play in this scenario and if the Creole barrel is “the lifeguard” that the activity needs. Apud, which is part of a group of experts in the sector made up of former Secretaries of Energy, assures that the Neuquén field of Vaca Muerta “does not have to be thought for the local market but for export”.
Journalist: what post-pandemic effects do you expect for the energy sector?
Emilio Apud: The pandemic has been a shock to the energy sector worldwide, as economic activity fell. Energy consumption, especially of oil and gas derivatives, plummeted, because the world energy matrix still has more than 50% between oil and gas, so prices fell and it affects us; not because we are exporters, but because it generates an internal “signal” of prices that both the provinces and companies are used to receiving state assistance.
In other words, the pandemic has an international effect, which is reflected in the local one but on the other hand, I notice a great lack of definition regarding the energy policy of the current government and signs that go against what the sector needs, which are investments and intensive capital to start it.
Q: What is the clearest signal that the sector needs today?
EA: What is necessary is to restore lost confidence, after being considered serial defaulters in the world. The signals that are being given are not the correct ones, the attempt to intervene in an agricultural company, such as the case of VICENTIN, the fact of the corruption conflicts that exist within the energy sector, so instead of adding points, points are subtracted from This recovery of confidence, and that unfortunately makes us have to postpone the long-awaited and necessary development of the hydrocarbon potential that you have there in Neuquén with Vaca Muerta.
Q: The Creole barrel is a state intervention that acts as a life preserver or not?
EA: Not so, because they should also intervene in the quantities and not only in the price. Demand fell, so if you want to completely save the provinces, or companies or people who work, the Creole barrel would have to be worth $ 120 or something, to compensate for the drop in volume, and both oil and the final product. They have a fixed price. That is a link that can fail due to the inflationary context that we have, the refineries do not want to work at a loss, it is all an emergency and circumstantial situation that in no way has to do with any future that we should expect from the energy sector, both derivatives of oil and gas, as of renewable energies.
Q: So, the barrel is a fiction about a price that does not exist …
EA: Unfortunately this is the case, they invoke things that are not true, I remember that 8-10 years ago the slogan was energy sovereignty, but what you have to see is the user or the people, not companies or governments.
Q: What role is Vaca Muerta going to play?
EA: Vaca Muerta is a medium and long-term project, which is going to begin to bear fruit and put in value that immense «reserve» that it has there in the subsoil only in eight or ten years, as long as it is not start getting investment for development. Before the pandemic, there was 30 or 40% of gas at the national level that came from Shale gas and in others, which was developing, but it is a field that should not be considered for the local market. The problem of the oil sector as I see it is that it was historically in a comfort zone in the internal market, when 90% of the oil industry is financed with what users pay and not with exports.
Argentina has to be competitive in the international market, because here there is something else that comes into play and that is that the oil and gas market will not last forever. In the next century or in 80 years this era is going to end, then it is necessary to obtain what Vaca Muerta has for both national consumption and neighboring countries. You have to be in the international market and for that you need investments, or to give clear signals, something that the current government is not doing and unfortunately the previous government did not give them in the end either. So this is one of the conditions, for there to be confidence there must be a political agreement from all sectors, because it is useless for them to promise laws when in two or three years one has to go and no one knows who is coming.
So that is what we call, state policies, a consensual policy and that some guarantee that whoever wins in government wins, from here to 15-20 years, will be maintained, as Chile, Peru, Uruguay or Brazil, where there are modifications but there are lines that do not touch.