Argentina's election could mark a new era for the oil industry
As the country goes to the polls on 28 October, international oil companies will be watching intently
International oil companies will be watching closely as Argentina goes to the polls on 28 October in a presidential election with important ramifications for the future of the country’s huge Vaca Muerta shale play.
Oil companies will hope that the election marks a new era for the struggling industry. Chevron, Total, Shell,ExxonMobil, Petronas and others have all established a foothold in the hugely attractive Vaca Muerta shale. But the interventionist and unpredictable policy moves taken by Cristina Fernandez de Kirchner’s government over the past decade have slowed investment.
Daniel Scioli, currently Buenos Aires’s governor, is the front-runner in the election and appears to be headed for victory. Although a member of the same party as Fernandez, Scioli has pledged to bring a more business-friendly approach to the oil patch. He has said he will maintain slew of industry incentives, such as a fixed domestic oil price of $77/barrel, which has shielded oil producers from the worst of the oil downturn.
“It is likely that Argentina’s next administration – whichever individual or party comes to power – will implement policies to help advance the shale industry,” Cefeidas, an Buenos Aires-based advisory firm said in a recent report. “This will serve to push the industry to develop more quickly than it has been able to over the last few years.”