Gas producer executives analyzed the main regulatory challenges that the industry has in Argentina. The focus was on the approval of the Base Law and the Large Investment Incentive Regime (RIGI) in the Senate this week. They agreed that megaprojects in the energy sector They cannot be achieved without a regime like the one debated by Congress. They also highlighted that, to scale investments, the regulatory framework must generate trust in the sector and have consensus to prevent it from being modified in the coming years.
Emilio NadraCo-CEO of CGC, Soledad Lysakdirector Gas de TotalEnergies and of Mariano D’AgostinoCommercial and Sales VP of Wintershall Deaparticipated in the panel What regulatory elements of the Argentine gas industry must be rethought to favor market development? of the Midstream & Gas Dayevent organized by EconoJournal.
Bases and RIGI
Nadra (CGC) opened the panel and stated: “I am convinced that the investment parameter is much higher with the Bases Law than without this law. There are megaprojects that cannot be done without RIGI”. He also indicated that “Prior to the Bases Law and the RIGI we have to ask ourselves how we can build a new consensus that allows us to have much greater continuity, because projects need long deadlines. If we build that consensus to carry out major developments “That allow a reduction in the price of our resources for the local and export markets, I believe it is the smartest way to take advantage of this opportunity and transform the potential of resources into wealth.”
In the same way, Soledad Lysak (TotalEnergies) highlighted that “the change proposed by the Base Law is fundamental. A RIGI is needed or a regulatory framework that generates trust. We need investments of scale and for them to stay in the country”.
For its part, Mariano D’Agostino(Wintershall Dea) stressed: “I think it is important to highlight three elements of the Base Law: trust, trust and confidence. If it were as easy as just setting rules and thus the investments arrive, it would be something else.” Furthermore, he highlighted that “trust is not imposed, but rather inspired. How do we inspire trust? We have to deliver what we promise.” And he added: “there is a second element, which is that there must be consensus around this program. If it is not very clear that society is convinced of this program and in a few years they are going to change this regulatory framework, trust will not appear and it will be more difficult to carry out these projects.. Trust and consensus are central.”
Scale investments
Nadra He indicated that “instead of taking advantage of the opportunity that resources provide, we have to build that opportunity. We have to be able to convey that this opportunity is very important for the sector and for the country”.
He also pointed out: “we need to build demand and make it as flat as possible and correct the risks that the strong seasonality of the local market has. If we achieve this and large-scale production, we could have lower costs and make better use of the resource we have”.
For its part, Lysak He referred to how to increase investments: “today between 10,000 and 15,000 million dollars are invested per year. The question is whether we want to continue with such linear growth.where we have speculative investments, where Argentine businessmen are going to continue investing and companies like us that have been in the country for many years are also going to continue being there or, on the other hand, We want to make a geometric leap and attract investments that really have muscle, that are really of scale and not speculation and that then go away”.
Finally, D’Agostino He stated that “we have to accelerate the change from the scarcity guideline to one of abundance and greater competition. There are elements that we have to think about, such as having a transparent price index that serves as a reference and anchor.”
