The Crude oil and condensate production of Argentina attained a value of 480,561.81 bd in 2020
The indicator recorded a historical growth (CAGR) of 0.09% between 2017 to 2020, and is expected to decline by...
GlobalData projects the figure to decline at a CAGR of ...
What was the impact of COVID -19 crisis in Argentina’s oil and gas industry in 2020?
The impact of COVID -19 crisis in Argentina’s oil and gas industry has reduced oil refining inputs and put additional pressure to the sustainability of the country’s natural gas supply. The winter months of June to August have the highest natural gas consumption of the year and nonetheless upstream producers have reduced their production by an unusual amount, making additional imports of LNG a likely solution to complement domestic supply. In order to minimize future production cuts the Argentinian government has planned to offer a subsidy to upstream producers for both oil and natural gas production.
The definitive incentive to sustain production requires less government intervention and gradual steps towards increased price liberalization.
Unconventional production in Argentina remains the main bet for full autonomy in oil and gas production. The current pandemic crisis will likely slow down its development and a wider unfavorable economic outlook of Argentina can risk delaying its full development for another 10 years.
Is Argentina’s New Subsidy Plan for Oil and Gas Not Enough to Increase Production?
As in other countries the lockdown measures mandated by the Argentinian government have had a direct impact on mobility and economic activity. As a result the demand for transportation fuels such as gasoline and jet fuel experienced the largest drop. By end of May there was a significantly lower demand for gasoline and jet fuel in comparison to their demand in March .
There is now in place the so-called Criollo Barrel Plan, which is a government policy to subsidy the price of crude oil sold by producers to refiners.
However refiners are still facing lower demand for fuel which translates into lower crude oil requirements. Thus the incentive of higher price for producers is countered by the demand destruction and might not have a significant impact in increasing refinery runs.
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