Vaca Muerta: government and energy sector convene to untangle importing process

Unions, companies, and provincial governments say low authorization rates could impact jobs

The Energy Secretariat will convene with individual energy companies working at the shale oil gas field Vaca Muerta following demands to ease importing obstacles. There have already been a series of meetings between business chambers, unions, and authorities, provincial and national. 

By addressing the issue on a case-by-case basis, government sources say they hope to prevent a halt in activities — Vaca Muerta has seen record levels of fracking and will receive more than US$10 billion in investments this year.

In recent weeks, the energy sector has raised its voice to make demands about obstacles in the country’s importing system (SIRA, for Argentina’s Importing System). According to union numbers, only 7% of SIRA approval requests were authorized in the past few weeks. That means there are operators “who only have the tools to operate for a month,” which puts more than 10,000 jobs at risk.

Sources at the Neuquén Federation of Energy Chambers (Fecene) said that a key issue is the limited number of fracking equipment. “When one of them breaks, you need to disassemble another to fix it, so this leads to urgent situations,” they said. They demand priority should be given to small and medium businesses with less fluid importing channels, and already had a meeting with the Foreign Trade Undersecretary Germán Cervantes to find solutions.  

The energy sector has a special importing channel called “Vaca Muerta Customs Corridor,” created to smooth import processes in what companies call the “green channel.” Neuquen government sources say that even requests from companies that were trying to pay for inputs using “their own dollars” are also stopped. 

You may also be interested in: Néstor Kirchner gas pipeline filling completed, is now operational

Neuquen’s Production and Industry Minister Facundo López Raggi said that “the green channel has been red for a month,” causing import requests to be stopped, and resulting in delays for critical inputs. Along the same lines, the province’s Energy Minister Alejandro Monteiro demanded that each province be part of a decision group that includes the union and the business chambers.  

The union also intervened, holding a meeting with Cervantes, Energy Secretary Flavia Royón and the head of Customs Guillermo Michel last Tuesday in Buenos Aires City. Secretary General of the oil workers union Marcelo Rucci said that workers are “at the risk of being fired” for lack of inputs and equipment.

“It’s hard to understand why they make decisions that hit the strategic production node at a time when you need more development and production to obtain dollars,” said union sources. 

The Energy Secretariat agrees on the Vaca Muerta’s importance for foreign currency reserves but contends that the country is going through a historic drought and that is why they have to “administer” the shortage of dollars. Sources close to Royón said that there are companies that resist financing imports. 

“I don’t know of a single pit in Vaca Muerta that has closed their operations because of this,” Michel stated in an interview on Public TV. 

Originally published in / Translated by Agustín Mango


All Right Reserved.  Buenos Aires Herald