Juan José Arangurenformer CEO of Shell and former Minister of Energy, assured that the situation in Venezuela does not represent a threat to the development of Vaca Muerta not even for Argentine oil. As he explained, the market is fundamentally governed by supply and demand, rather than by geopolitical conflicts. Furthermore, Venezuela has a different heavy oil than that obtained from the Neuquén field.
“It does not complicate the development of Vaca Muerta at all. “Argentina has its own internal challenges,” said the former official this morning in statements with Radio Mitre.
“The market is not adjusted so much by political issues, but by supply and demand. This happened in recent years. We had important events, such as a bombing of underground nuclear facilities in Iran (an important producer) in May, and Russia’s invasion of Ukraine and the conflicts in Gaza continue,” he described.
And he added: “The global market is oversupplied. In other times it would have reacted upwards due to geopolitical conflicts, but remains at relatively low values because China’s growth slowed down and other forms of energy such as renewables appeared.”
and compared the difference between Venezuelan and Argentine crude oil. “Venezuelan oil is heavy and needs to be diluted for transportation and refining,” he explained, adding that “the price of Brent is currently trading at US$ 40 per barrel (around US$ 60less the discount US$ 20), while, on the other hand, Vaca Muerta oil is between US$ 58 y US$ 60 per barrel, so There is no direct competition between both products”.
In addition, he reviewed the numbers of the sector. “Argentina produces 850,000 barrels per day: 550.000 are destined for the domestic market and 300.000 are exported. The objective is to produce around 1.5 million barrels per day“, accurate.
“For every 100,000 barrels we export at the current price, Argentina has an export bill of US$ 2.5 billionwhich is important so that we can improve the energy trade balance and contribute to the macroeconomic stability of the country. We have to be cost efficient and maintain an energy policy that allows increasing exports for the benefit of the country,” he noted.
On his relationship with the current GovernmentAranguren acknowledged that he knows Horacio MarinCEO of YPF“from his time at another company.” I direct a master’s degree at a Technological Institute of Buenos Aires in Sustainable Energy Development.
“We visited the YPF facilities, things are being done very well and Argentine energy policy, based on a reformulation of the Hydrocarbons Law established by the Bases Law, is generating the possibility of transforming our resources into reserves. AND The evolution in exports will allow us to consolidate the health of our local macroeconomy”, he opined.
Venezuela’s oil production
Aranguren recalled that, since the beginning of the 21st century, Venezuelan oil production plummeted significantly. “With the emergence of Chávez, oil structures were expropriated and production fell precipitously. At the beginning of the 2000s, the country produced around 3.5 million barrels diaries. Today it barely reaches million barrels per day”, he compared.
And he reinforced that this deterioration occurred after the expropriation of structures in the sector during Chavismo and the lack of sustained investment in the industry.
In that context, he clarified that “as in the case of Argentina Venezuelan oil belongs to Venezuelans” and? “no country stays with that resource“In any case, freedom will be given so that companies that produce in Venezuela can freely sell the oil they produce,” he said.
“In fact, An American company, Chevron, is still producing oil in Venezuela.who did not leave and continued processing at a lower level, in association with PDVSAthe state oil company, which defines export destinations and often sells crude oil at prices that do not reflect market values, as is the case with Cuba or China”, he graphed.
“All the companies that are working that are not local, like Chevron or Repsol and some other smaller ones, They have associations with PDVSAand they decide who to sell or provide crude oil to at prices that are not necessarily market prices,” he insisted.
“So, in the short term, if Venezuela invests again, because conditions change and production can be restored, It’s not going to happen in a year or two, but in the long term. In general, When prices are too low, companies lose profitability and therefore They close production until a balance equation is reestablished that allows obtaining profitability on the investment,” he concluded.