TOGY talks to Río Negro province Secretary of Hydrocarbons Sebastian Caldiero about policies implemented by the provincial government to manage resources, the hydrocarbons potential of the province, and the role of SMEs in the domestic industry. Río Negro is the fifth-largest oil-producing province and the seventh-largest gas-producing province in Argentina.
How do you plan to increase the flow of foreign and national direct investments to the hydrocarbons industry? What fiscal advantages will you provide?
The renegotiation provides certitude for the next 10 years. This means that the companies involved with the production of oil and gas have their activity guaranteed for the next 10 years without any surprises. This has strongly impacted exploratory plans, generating greater activity by the licensees.
In the future, what we could do is establish base bidding documents and conditions adjusted to Law 27.007, with biddings that have international reach.
Regarding fiscal advantages, it is our intention that they adapt to the scope of the projects and the resulting investments. We do not believe in abstract additional advantages, but in special advantages for concrete projects that deserve them. We are willing to agree on those if necessary to [drive] activity in the province.
What is the importance of Vaca Muerta for Río Negro?
The characteristics of the Vaca Muerta formation that is beneath Rio Negro does not allow an intensive development of shale resources. In Río Negro, unconventional activity is associated with tight resources in other formations. Although, we are obviously within the range of activity impact of Vaca Muerta and we work daily to respond to that reality.
What role will Empresa de Desarrollo Hidrocarburífero Provincial (EDHIPSA), play in Rio Negro’s hydrocarbons industry?
EDHIPSA is one of Río Negro’s state agencies. It supports the state Secretariat of Energy, within the established framework of institutional strengthening with the aim of optimising the taxation in hydrocarbons issues. However, we are also working to exercise the full original mandate of the provincial state and manage the hydrocarbon resources we have in our territory.
This is why we hope that in the future, EDHIPSA will be able to proceed towards exploration, development and exploitation of non-renegotiated areas by itself, or with the assistance of or association with third parties – for example, through the formation of UTEs [transitory union of companies] or through bidding processes – and always within a framework of competition with private companies where EDHIPSA does not constitute an obstacle for foreign investments, and thus for development. In fact, we hope that the contrary will take place, that EDHIPSA as another actor with its capacity and expertise, can strengthen foreign investment through public-private partnerships.
How can the role of Río Negro’s SMEs be strengthened and their competitiveness increased in the oil and gas industry?
Together with the Secretariat of Science, Technology and Production Development of the province, we have generated working spaces with Río Negro’s SMEs, both in mining and in the oil industry, that have been very useful.
The goal of these meetings is to know the demands of the different productive sectors of Río Negro and look, from the scientific and technological side, for a solution that often times you can find in the province and is not known.
Under the law by which concessions were recently renegotiated, a “buy local” rate was established, which is audited through a follow-up commission, integrated by representatives of all the sectors involved in hydrocarbons activity. This plural space is a novelty in the national arena and is giving great results.
How can the provincial and federal governments co-operate to improve the performance of the provincial hydrocarbons industry and general socioeconomic development?
First of all, by respecting the areas of responsibility of each one for the industry. Also by promoting dialogue and encouraging the participation of all the jurisdictions in a federal arena, and which includes all the actors of the activity.
Where would you like the provincial hydrocarbons industry to be positioned by 2020?
Río Negro is the fifth-largest oil producer and seventh-largest gas producer [in the country], with a growing field in the area of Estacion Fernandez Oro, where half the provincial gas is produced and where today, four drilling rigs are working. We hope to consolidate these policies that we have had since early 2012, which certainly will allow us to have a more important role in the national context.
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