MercoPress. South Atlantic News Agency

Argentina insists with self-sufficiency in oil production in four years

Federal Planning minister De Vido pledging ‘hydrocarbons sovereignty’

Argentine President Cristina Fernández administration agreed with oil-producing provinces and unions from the sector to strictly control the levels of exploration, production, the amount of equipment in use and the total number of jobs in each of the oil fields across the country, with the goal of reaching hydrocarbon self-sufficiency within four years.

The federal government signed an agreement with the Federal Organization of Hydrocarbon Producing Provinces (Ofephi) and union representatives from the oil sector that details this new oversight scheme.

The agreement aims to “guarantee the fulfilment of the objectives in the hydrocarbon sovereignty law,” said planning minister Julio De Vido, referencing the measure that was approved a little more than a year ago and allowed the Argentine state to expropriate a majority stake in the country’s largest oil company YPF from Spain’s Repsol, its previous controller. The law called for Argentina to become self-sufficient in hydrocarbons.

The agreement creates a technical committee “to verify” that all regulations and incentives imposed by the government for the sector are fulfilled, a working group that will be in charge of analyzing and reporting on the levels of investment “oil field by oil field” and a labour observatory that will guarantee “respect for the collective bargaining” in the sector.

“We will carry out an analysis of each of the companies,” explained Governor Martin Buzzi from the southern province of Chubut.

The country’s largest oil producers include YPF, Pan American Energy, Brazil’s Petrobras, China’s Sinopec, France’s Total and local firms Pluspetrol and Tecpetrol.

In February 2012, Ofephi signed a document warning companies that exploration licences could be revoked if they failed to increase production by 15% within two years.

“The President is seeking to generate the hydrocarbon volumes necessary to meet this demand that is qualitatively superior to any country in the region,” De Vido added.

Yet it was evident that even if companies wanted to increase production they could face equipment problems due to a lack of drilling rigs. “There is practically no equipment available in Argentina,” Buzzi warned.