Official: Argentina To Boost Crude Oil Output To 653,000 Bpd By 2025
LA JOLLA, Calif., May 26 (Reuters) - Argentina aims to eliminate its need for crude imports while usincreasing domestic oil output to 653,000 barrels per day (bpd) in 2025, a 23 percent increase from 2015, an official from the Energy Ministry said on Thursday.
The South American country is working to cover its energy needs after becoming a net importer three years ago due to falling crude and gas output amid a low investment environment.
To achieve that, it needs to boost local output to cut crude imports and start reducing costly purchases of liquefied natural gas (LNG) currently made through tenders on the open market and from neighboring Chile.
"We don't believe in self sufficiency. We believe in supplying the country's needs," said Daniel Redondo, Energy Planning Secretary from the Energy Ministry, at a conference in La Jolla, California. "Self sufficiency would imply to have an exportable surplus and that is not going to happen soon."
At the end of 2015, Argentina's energy imports surpassed exports by $6.5 billion, Redondo said.
The ministry expects Argentina will be forced to keep buying costly LNG for at least five years. It offered to buy some 47 cargoes so far this year and it could buy up to 80 cargoes depending on the demand, also adding extra imports of gas oil in the coming weeks.
But incentives given to Argentine producers to enable them to sell their crudes domestically at a price of $55 to $67.50 per barrel would help reduce oil imports.
Redondo said this incentive will exist until the international benchmark, Brent crude which settled at $49.59 on Thursday, surpasses some $55 per barrel. Companies operating in Argentina, including Pan American Energy LLC, consider these domestic purchase prices attractive enough, the firm said.
Refining firms have imported 2 million barrels of African crudes this year to feed plants with light crude grades that are not abundant in Argentina, and they plan to import at least 1 million barrels more in the second half of the year.
Talks between producers and refiners are being held under the Energy Ministry's supervision to ensure all light oil produced domestically will be processed in the country. And new deep conversion units are being installed at local refineries to process more domestic heavy crude.
The new government of Mauricio Macri is trying to attract foreign capital to the oil industry after a decade of low investment and the nationalization of its main producer, YPF.
It also wants to limit purchases of foreign petroleum to gas imports from Bolivia, considered cheap at a price of $3.2 per million BTU, and gasoil imports for winter.
The Energy Ministry estimates that some $50 billion will be needed until 2025 to develop upstream, downstream and electricity projects, including a 200,000-bpd expansion to the country's refining network and new thermal generation plants that were recently offered.
Argentina this month received 60 proposals from firms interested in installing power plants with a joint capacity of 6,000 megawatts, compared with 1,000 megawatts originally offered, the secretary said.
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