Highly p rospective acreage, a strengthening competitive landscape and supportive pricing dynamics will help insulate the Argentine shale sector from aggressive clawbacks in industry spending. A shift toward a more centrist government under the newly inaugurated Macri administration will open up significant investment opportunities in Argentina, particularly within the oil and gas sector. As such, t he core Neuquen shale province will experience increased development over the course of the next decade , although more peripheral shale formations could take longer to develop .
The main trends and developments we highlight in the Argentine oil and gas sector are:
Argentine real GDP growth will begin to accelerate starting in H216 following a sharp contraction in the first half of the year, as the economy benefits from the economic reforms pushed through by President Mauricio Macri. These policies will erode short-term private consumption but will usher in a period of more robust long-term growth, benefiting upstream development of both oil and natural gas resources.
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Argentinean shale prospects will be resilient in the face of volatility in oil prices as low commercial breakevens and vast proven reserves will encourage continued investment into the sector thanks to an improving regulatory environment
Extended subsidies for Argentine crude exports announced on March 11 will help fund extraction of heavier domestic grades by key producers through Q216, mitigating the effects of a broad industry downturn. The policy strengthens President Macri's commitment to the industry, underpinning our upbeat outlook for the year.
Natural gas re-exports from Chile to Argentina in 2016 mark a critical turning point in energy relations between the two countries. Trade will be supported by key infrastructure expansions in Chile, the US, and Panama and will provide Argentina with up to 5.5mn cubic metres per day (mcm/d) of natural gas through the five-month winter season from May through September, supporting a seasonal uptick in demand amid a continued deficit of domestic supplies.
The victory of Mauricio Macri will boost the growth prospects of the country's power market and demand for natural gas feedstock. Macri's ability to bolster investor confidence in the market, along with his plan to cut electricity subsidies and reduce state control over the energy sector, supports this view.
The Argentina Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Argentina including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.
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"Argentina Oil & Gas Report Q2 2016" Published
Company: Fast Market Research, Inc.
Contact Name: Bill Thompson
Contact Email: press@fastmr.com
Contact Phone: 1-413-485-7001
Contact Name: Bill Thompson
Contact Email: press@fastmr.com
Contact Phone: 1-413-485-7001