Florencia Barragan 
Argentina’s top oil companies have come out in strong support of President Javier Milei’s omnibus bill, which is currently being debated in Congress. They made their views known on Tuesday via Carlos Ormachea, head of the Chamber of Hydrocarbon Exploration and Production (CEPH), who spoke in the Chamber of Deputies.
Ormachea, who is also CEO of Techint group’s oil company Tecpetrol, argued for liberalization of oil and gas prices and exports for the sector and promised that, if the bill is approved, companies will invest US$15 billion per year.
CEPH includes companies such as YPF, Vista, PAE, Tecpetrol, and Pampa Energía.
Ormachea joined the briefing meeting of the General Legislation Commission, where several guests gave their opinion on the Omnibus bill, formally called “Bases and starting points for the freedom of Argentines.”
“We consider that price freedom, trade freedom, and the elimination of potential biases in political decisions related to the sector, will positively impact the investment process,” Ormachea said.
Promise of investment
Energy Secretary Eduardo Rodríguez Chirillo, one of the minds behind the omnibus law, said in Congress last week that Vaca Muerta “only exploits 6% of its full potential” despite being the second-largest shale gas reserve in the world. Ormachea echoed the secretary in his remarks.
“To transform this potential into reality we need only three things,” Ormachea said. “Prices aligned with what is currently happening in the world, the ability to export without restrictions, and access to foreign currency to repay investments. This project substantially contributes to solving the first two problems.”
The foreign currency issue is not included in the project, and depends on the Central Bank eliminating currency controls.
“If the proper conditions are created — and this project contributes significantly to that — we believe that by 2030, which is a fairly short period, the oil and gas production sector could multiply Argentina’s current oil production by 2.5, reaching one and a half million barrels a day,” Ormachea said.
To achieve this, he said, there would be “annual investment of about US$15 billion.” In addition, he said, this will create additional income of about US$5 billion per year for the Treasury.
“There will be an improvement of US$29 billion in Argentina’s trade balance, going from a deficit of US$4 billion in 2022 to a surplus of US$25 billion,” he said of the dollar scarcity issue.
Ormachea stated that these figures are not “a fantasy” but “perfectly feasible” due to rising global energy demand — the International Energy Agency predicts 47% growth by 2050. Moreover, he argued, Argentina not only has the natural resources to supply domestic consumption for 90 years, but also has “oil companies with the capacity and dedication to invest, as has been demonstrated every time the appropriate conditions existed.”
Letter backing the government
The CEPH also sent a letter to the government stating their support for the bill and highlighting articles that lower the priorities of domestic market self-sufficiency and breaking the link between local oil and gas prices from the international market. They praise the following elements in the bill:
- Article 255, which changes the goal of the Executive Branch from “fulfilling the country’s hydrocarbon needs” to “maximizing the income obtained from exploiting resources and fulfilling the country’s hydrocarbon needs.”
- Article 258, which states that “the Executive Branch may not intervene or set market prices in the domestic market at any stage of production. In the case of state companies, they may only sell at prices that reflect the competitive balance of the industry — that is, at the corresponding export or import parities, as appropriate.” Without mentioning it, it refers to the Kirchnerist government’s intervention of YPF.
- The bill adds: “Permit holders, concession holders, refiners and/or sellers may export hydrocarbons and/or their derivatives freely, per regulations issued by the Executive Branch, who will set the conditions for their effective entry into force.”
- Article 300, which repeals advantages for state companies over private ones
However, the CEPH did present two objections to the bill. It rejects Article 268, which “removes the possibility of indefinitely extending 10-year concessions,” and Article 277, which says that “if the exploitation concession expires, there must be a new tender.”
