“Everyone agrees about the significance of Vaca Muerta”
Tecpetrol CEO Ricardo Markous spoke at the latest edition of the sector’s traditional annual meeting.
As they do every year, the main players in the oil industry came together at the Experiencia IDEA conference in Neuquén, the capital of Vaca Muerta, to spend two intense days in meetings to discuss the main challenges facing the sector. Attended by operators, service companies and government representatives, the Experiencia IDEA was the ideal context in which to examine current perspectives and the outlook for the Oil & Gas sector—as well as the newer kids on the block, such as biofuels, lithium and hydrogen.
The Experiencia IDEA conference this year welcomed as its keynote speakers the Minister of Economy, Sergio Massa, Marcos Bulgheroni, CEO of Pan American Energy Group, and Pablo Iuliano, CEO of YPF, who were joined by Omar Gutiérrez, the Governor of Neuquén and other distinguished figures and experts from the private and public sectors. The main theme for this year’s get-together was the international context and its impact on the country, as well as how to take advantage of it within the framework of the energy transition.
Ricardo Markous, CEO of Tecpetrol, spoke about "The opportunity facing oil and gas in Argentina: Vaca Muerta and conventional hydrocarbons,” on a panel shared with Ricardo Rodríguez, President of Shell for Argentina, Chile and Uruguay. Markous discussed the current situation in the country, as well as the Neuquén Basin, the conditions necessary for the industry to operate and grow, and the potential offered by new energies.
“It was an extraordinary 2022,” began Markous, adding that, “Vaca Muerta shale is producing almost 50% of the country's gas and this year, and thanks to the GNK, we will surpass this mark. This level of output is happening because we are putting in the effort. Vaca Muerta has produced spectacular yields in recent years. At the outset, when we planted our flag in Fortín de Piedra, drilling times took over thirty days and we were only able to carry out four fractures a day. Now we are managing schedules of close to twenty days, even in complex locations, and executing some seven to ten fractures.”
Addressing a packed and attentive audience, Tecpetrol’s CEO talked about record production levels and commitments, encouraging news that stems from the company’s far-reaching commitment. And, of course, from the work invested in planning for the years ahead. “The current global and regional situation makes the country's gas highly competitive. There is abundant oil and gas for many years to come. The Russian invasion of Ukraine has opened up an opportunity for Argentina to step up to the plate, a responsibility that we must exploit to the full. Additionally, the energy transition is already underway. Argentina can make things happen, and is doing this, not only in oil and gas but also in hydrogen, lithium and copper.”
The energy transition
Francisco Grosse, Business Development Sr. Manager, was part of the panel “Lithium is a reality: is hydrogen close?” Exclusively dedicated to the energy transition, he focused on the potential role that the country can play regarding the consumption and adoption of new energies.
“We have been analyzing the issue from different perspectives, since hydrogen is one of the key tools for the decarbonization process. The Techint Group has steel plants all over the world and one of the solutions we are looking at to decarbonize them is hydrogen. In parallel, we have set up an investment fund to finance new technologies aimed at derisking and creating scalability.”
"The current boom is taking place in the power generation segment, specifically as regards hydrogen cell fuel, being driven by countries that have no natural gas reserves of their own (for example, European countries, particularly affected by the situation in Ukraine and the recent winter, and by countries willing to pay a green premium to decarbonize. That’s where the demand is coming from.”
Like everything at Tecpetrol, tomorrow is just as important as today: “Our path currently is to lay the foundations to be able to meet demand. These foundations include the necessary draft legislation, infrastructure, and know-how. We have to be prepared for the moment when the market becomes more mature.”
Grosse believes that this task can only be achieved if all sectors come together and contribute their efforts: “We must press forward with the legislative issue because regulating this area takes time: in the United States, one of the pioneering countries in this regard, the first legislative bills took seven years to be approved. By the time demand for blue hydrogen has materialized, as it is stored underground, we must be ready, with the necessary regulations in place.”
Markous was emphatic in his support of this approach in the closing panel, where he participated as a member of the organizing committee: “We must build consensus through dialogue between the sectors. Everything has to come together. There seems to be general agreement among the different political players about what Vaca Muerta means for the Argentina of the future. Especially now that the global and regional situation is making the country's gas so competitive. All we need are stable rules, access to foreign currency and commercial freedom, three fundamental factors we need to increase production in the future.”