MercoPress. South Atlantic News Agency

Gas reserves horizon in Argentina falls from 25 to 9 years

Argentina's natural gas reserves have dropped dramatically from a 25 years horizon to just 9 years between 2001 and 2005, according to a report from the Nation's General Auditing Office, AGN, covering 1993 to 2006.

"Reserves data reveal a sustained annual diminution from 2001 onwards, accumulating a reduction of 54.5% in 2005 compared to 2000", says the report. Therefore the reserves/production ratio has fallen from 25 years to 8 to 9 in 2005. The audit attributes the drastic drop in natural gas reserves to a strong descent in exploration investment, exploitation of reserves by corporations geared to "recover investments in the shortest time possible" and the extraordinary increase in domestic consumption. Natural gas production underwent "sustained growth from 1993 to 2001", but then begun dropping in 2002 and continued in the subsequent years "at an increasing pace". The report estimates that Argentina needs annual investments of 4 billion US dollars during a decade to satisfy its growing energy demand, in the framework of an economy with an annual growth rate of 7%. "These facts leave the Argentine energy system in a most critical situation. Therefore all measures must be taken at national and regional level to ensure a quick and sustained growth of energy supply", underlines the report. This means developing transport and distribution infrastructure plus orienting all possible investment "be it private, government or development to the exploration and production of new hydrocarbons deposits to increase the reserves horizon". The report also points out Argentina's high energy dependency on natural gas, which represents 53% of the country's energy structure: manufacturing, electricity generation, land transport and home heating and cooking consume the resource. According to the Argentina's Gas Regulator Office, Enargas, 15% of the country's natural gas production is exported and the rest is for the domestic market. In 2006, imports from Bolivia reached 1.430 million cubic meters and exports 3.068 billion cubic meters.