MercoPress. South Atlantic News Agency

“Energy difficulties, not energy crisis”

Repsol-YPF CEO Antonio Brufau said Thursday that “there's no energy crisis in Argentina but rather energy difficulties” and called upon the Argentine people to save energy and let “oil and transport companies do what is needed in exploration and production”.

Mr. Brufau made the remarks during a conference in Buenos Aires where he talked about "Business companies for a better world".

Repsol-YPF and other hydrocarbons companies have been strongly lobbying in Argentina for the de-freezing of oil and gas prices in line with world markets.

Mr. Brufau said that in the last few years Argentina has turned from a hydrocarbons "supply market" to a "demand market".

Repsol-YPF CEO also underlined that in Argentina there's no savings culture, as happens in Europe, "where we all know that in a not too distant future this non renewable resource will become exceedingly dear".

The Argentine government which originally argued that foreign oil and gas companies had not complied with the investments requested in contracts, rejected point blank to allow them to increase prices and even called on popular support to boycott those companies who dared raise them at the fuel pump.

However following last year's severe energy shortage and prospects of an ever worse situation this winter, the Argentine government this week announced a program of tax incentives for the exploration and exploitation of new hydrocarbons deposits.

Last year to satisfy domestic consumption Argentina drastically cut supplies of natural gas to neighbouring Chile causing an irritating diplomatic rift between both countries.

This winter the energy saving program has been expanded and Chile and Uruguay have been warned that the cuts program will continue. Furthermore Argentina has been forced to import gas from Bolivia and fuel oil from Venezuela to compensate the domestic shortage of energy which has also been affected by scarce rainfall.

A report released this week in Buenos Aires by an energy think tank said that if Argentina expects to grow at a sustained annual rate of 3%, it will need to invest 33,3 billion US dollars in the energy sector from now to 2020.

If the desirable growth rate was 5% (which would enable to double GDP), the energy sector will demand 53 billion US dollars, but even in the worst scenario of an annual expansion of 1,2% (the country's average in the last 23 years) the bill adds to 17,5 billion US dollars.