From The Financial Times, news that Pan American Energy – the second largest oil and gas producer in Argentina – has announced the country’s biggest hydrocarbons discovery in recent years and a $1bn investment programme – music to the ears of a government grappling with serious energy and power shortages resulting from President Cristina Fernández and her husband, former President Néstor Kirchner desires to keep domestic energy prices and utilities tariffs artificially low to boost an economy recovering from a debt and devaluation crisis in 2001-2002. As the article notes:

“…The company, which is 60 per cent owned by Britain’s BP and 40 per cent by Argentina’s private Bridas Corp, said in a statement the discovery near its existing Cerro Dragón field in the southern province of Chubut, contains 100m barrels of oil equivalent.

It also said it was drilling a second well in the northern province of Salta, ”which, if successful, would confirm the existence of a very large gas deposit”, and was looking closely at gas prospects in Tierra del Fuego and offshore.

…Analysts say some $3bn-$3.5bn a year investment in oil, gas and electricity is needed to keep the economy growing at 5 to 6 per cent. But national oil production hit its lowest level in 2005 since 1998, and gas production, which has been rising steadily, sloped off in 2005 compared with 2004, according to the latest official data.

…the La Nación newspaper quoted data from Cammesa, the electricity wholesale market regulator, showing Argentina spent $4bn in the last four years subsidising electricity tariffs, buying fuel oil and diesel, and importing electricity from Uruguay and Brazil – enough to have built six 800MW power stations and to have had a net energy surplus this year. Cammesa had no comment on the figures.

 

 

Argentina is moving ahead on plans to build a pipeline costing $1.9bn to import 27.7m cubic metres of gas a day from Bolivia by 2010, but Bolivia needs more investment yet in its own energy sector to meet the ambitious goal.”