Recently, the present President and CEO of YPF Horacio Marín declared that “it’s inconceivable to achieve US$ 30,000 million in crude oil exports with out the Large Investment Incentive Regime (RIGI)” contained within the Base Law that President Milei seeks to approve.
This assertion doesn’t appear true in mild of the truth proven within the sector.
Without any promotional regime, YPF reactivated the OTASA Transcordilleran Pipeline and as soon as once more exported crude oil to Chile. There had been preliminary 45,000 bbl/day that might be expanded till reaching 70,000 bbl/day, first, and 110,000 bbl/day at its most capability.
During the primary 9 months of 2023, 101,000 bbl/day had been exported on common on condition that nationwide manufacturing already exceeds home demand by that magnitude.
Oledelval SA is advancing sooner than anticipated within the development of the Duplicar Plus Pipeline. This is a pipeline parallel to the one which exists at the moment, which is able to double the present transportation capability from Vaca Muerta to Puerto Rosales, taking it from 360,000 bbl/day to 720,000 bbl/day.
This new manufacturing, given the already surpassed saturation of home demand for Refining, might be solely destined for export, from February 2025, when this new Pipeline enters service.
Vaca Muerta’s productive capability by way of oil is restricted solely by the capability of the pipelines to evacuate its manufacturing.
The official bulletins from Shell, Vista, Pampa, Pluspetrol and YPF that anticipate investments to double their present manufacturing to coincide with the commissioning of the Duplicar Plus, affirm this.
Besides, YPF has in a complicated state and with an environmental license, the development of the Vaca Muerta South Pipeline that may hyperlink that Neuquén manufacturing space with the port of Punta Colorada in Río Negro.
It is an oil pipeline with the capability to move 360,000 bbl/day, for whose development YPF is already on the lookout for companions among the many oil producers of Vaca Muerta.
In addition, and in addition with out RIGI, Oldelval SA has introduced the event of its Triplicar undertaking, which might be put out to tender in March of subsequent yr and put into service in 2026. A brand new pipeline that might additional broaden its transportation capability by one other 360,000 bbl/day , bringing it to a complete of 1,080,000 bbl/day.
As defined earlier than, the brand new crude oil produced and transported by each Vaca Muerta Sur and Duplicar Plus and Triplicar can have an unique export vacation spot.
These giant trunk oil pipelines, comparable of their transportation capability and dimensions, have a price introduced by the businesses of between US$ 1,000 and 1,500 million, which might attain US$ 2,000 million if, as within the case of Vaca Muerta Sur, it’s required. construct port infrastructure. If these prices are in contrast with the worth of the annual manufacturing of crude oil able to transporting which is able to attain US$ 10,368 million at present costs, the comfort of such investments and their pace of reimbursement may be clearly understood.
In this manner, with out contemplating the potential development of Vaca Muerta Sur, nor what Palermo Aike can contribute in Santa Cruz, the off shore of the Atlantic coast nor typical manufacturing; Vaca Muerta will attain manufacturing of multiple million bbl/day over the subsequent 4 years, and can increase crude oil exports by 821,000 bbl/day, equal to US$23,973 million yearly.
Without any particular regime, we now have the current panorama.
Of course, a regime just like the RIGI offered for within the Bases Law is of curiosity to firms, on condition that it could deliver them extraordinary income over these already foreseen, since they’d have related decreases by way of Income Tax and VAT, elimination of Import and Export Duties, absolute free availability of manufacturing for export and free disposal of international foreign money.
The counterpart of those advantages, pointless to broaden Vaca Muerta manufacturing and geometrically multiply crude oil exports, They might be mirrored in decrease tax assortment for the nationwide, provincial and municipal states, and alignment of the interior worth of fuels with the worldwide worth.
But as well as, the format of the RIGI and the customs advantages it grants would consolidate a scheme by which firms that develop RIGI tasks It can be extra useful and cheaper for them to supply items and providers themselves by a subsidiary firm created for this objective and related to the undertaking, than to contract it to SMEs, or native or nationwide firms, people who, by not having such customs advantages, can be at a aggressive drawback given the upper prices derived from the taxes and import duties by which they’re affected.
Therefore, the reply to the query within the title of this reflection is decidedly no.
However, it could be advisable to ensure for this sort of funding authorized and tax stability, a stage of international foreign money availability in accordance with the quantity of the funding and its amortization, in addition to to switch its income; however all the time safeguarding the participation of the nationwide trade and its improvement within the provision of products, and of SMEs and regional firms within the provision of providers.
The assertion by the President of YPF falls inside the new paradigm that the Base Law seeks to determine, adopting the maximization of enterprise income as a precept and object. and that he, as an official appointed by President Milei’s authorities, interprets completely.
Finally, as a closing abstract, this RIGI shouldn’t be essential to multiply the manufacturing of Vaca Muerta, for personal capital to construct new pipelines to move the brand new manufacturing to the ports, and to achieve US$30,000 million in related exports. This RIGI is just required to multiply the income of the big oil firms, at the price of a multimillion-dollar switch from the pockets of Argentine customers, of the lack of competitiveness and work for the nationwide trade, SMEs and regional firms, and the lower in State assets.
* Accountant, former advisor to the Ministry of Energy within the administration of Alberto Fernández.