MercoPress. South Atlantic News Agency

Region's energy equation depends on Chile/Bolivia

If Chilean-Bolivian litigation can be solved, the region could rapidly achieve an “energy equation” putting an end to all supply problems, said Argentine president Nestor Kirchner currently in a state visit to Germany.

During a meeting with the Confederation of German Industry several of which members are strong investors in Argentina Mr. Kirchner talked about the energy situation in South American and the current insufficient Bolivian supply to Argentina.

"The main thing is overcoming several problems of the region, particularly between Chile and Bolivia; with this aside we can have a realistic energy equation for the region", said Mr. Kirchner adding that much depended on a "stable (political) scenario" in Bolivia and a quick "rationalization of prices".

The controversial statements were leaked to the German and Argentina press during the closed doors meeting of President Kirchner with German industrialists.

As to Argentine energy production, Mr. Kirchner described the current situation as a "transition" and one in which demand from economic growth will be met with the necessary "correctives" as well as trying to comply with standing gas export agreements to Chile.

President Kirchner emphasized that the natural gas export contracts are "more than a problem for Argentina, a problem for the companies that should have done the necessary drilling that would ensure sufficient production for exporting and domestic demand.

With the conjunction of Patagonian production and the northeast pipeline (Bolivia) Argentina can achieve on the long run a supply of gas in excess of demand.

Mr. Kirchner recalled that in the nineties Argentina's natural gas reserves expanded beyond demand but "unfortunately exploration policies were abandoned" and investments in distribution were lacking. In fact the Argentine situation suffered greatly in the energy sector because of "lack of investments".

Finally Mr. Kirchner argued that "Argentina is a gas and oil country, particularly gas, but not truly a producer. Let's hope blesses us with abundant domestic production so we can export a lot".