Argentina’s energy woes deepen
21 February 2012
Despite the huge discoveries, don’t expect unconventional oil and gas to drag Argentina out of its energy-import problem just yet, says Justin Jacobs
THE EMERGENCE of Argentina’s potentially vast unconventional oil and gas resources could not have come at a better time for the country. Although historically a significant regional oil and gas producer, output from Argentina’s conventional resources is in sharp decline, while strong economic growth and artificially low energy prices are driving consumption higher. Once a significant hydrocarbons exporter, Argentina faces a future as a net importer of oil and gas in just a few years.
The transformation has already happened in the natural gas market, which has still not recovered from the energy crisis of 2004. In that year, a severe domestic gas shortage forced the country to cut its exports to Chile and Uruguay and begin importing gas by pipeline from Bolivia. But what the government hoped would be a short-lived crisis has endured: Argentina has, in the intervening years, become ever more reliant on gas imports.