MercoPress. South Atlantic News Agency

Argentina's energy crunch forecasted to worsen

Argentina's energy shortcomings in the near future unless massive investments are undertaken were revealed during a recent Council for the Americas forum held in Buenos Aires titled “Argentina: growth and investment opportunities”.

Argentine government officials plus 300 businessmen from the country's leading industries were present at the forum co-sponsored by the Argentine Chamber of Commerce.

Following a presentation by Julio De Vido Argentina's Planning Minister where he outlined the government's energy achievements and projects in the different fields, thermal generation, dams and gas pipelines, Ali Moshiri head of Chevron's Latinamerica Exploration Division offered a rather bleak picture of the country's future energy prospects.

"Current investment is only sufficient to keep ongoing production, with no additional exploration", said Moshiri who with charts forecasted that Argentina's gas and oil deposits will run dry by 2030.

"We're open to long term planning, but subsidies and market distortions must be eradicated. We're willing to help because we trust in Argentina's potential", said Moshiri who insisted that a deregulated market was a crucial signal to advance "with new contracts that attract hydrocarbons exploration and exploitation".

Gustavo Cañonero, chief economist from Deutsche Bank praised the Nestor Kirchner administration for the extraordinary recovery of the Argentine economy, but cautioned that the country is benefiting from the current world situation which is "particularly positive for commodities producing countries".

However, "until 2007 all is under control, but from then on huge investments will be needed to face the energy situation", said Cañonero who anticipated a minimum annual investment of five billion US dollars and 10 billion "if the current supply and surplus exports are to be expanded".