Energy Sector Argentina April 2015
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Table of Contents III.Natural Gas Sector 1. 2. 3. 4.
I. Country Overview 1. 2. 3. 4. 5. 6. 7.
Macroeconomic Indicators Macroeconomic Forecasts Energy Sector Highlights Shale Development Oil & Gas Rents as % of GDP Primary Energy Consumption Sector Forecasts
IV. Electricity Sector 1. 2. 3. 4. 5. 6.
II. Oil Sector 1. 2. 3. 4.
Oil Sector Highlights Proven Reserves of Crude Oil Production & Consumption Refining Capacity
Electricity Sector Highlights Installed Power Capacities & Supply Generation & Consumption Final Consumption by Type Low-Carbon Electricity Generation History Renewable Energy – Capacities & Generation
V. Main Players 1. 2. 3. 4. 5.
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Natural Gas Sector Highlights Proven Reserves of Natural Gas Natural Gas Production & Consumption Natural Gas Imports & Exports
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Top Oil and Natural Gas Producers Yacimientos Petrolíferos Fiscales (YPF) Pan American Energy (Sucursal Argentina) LLC Petrobras Argentina S.A. Companias Asociadas Petroleras SA - CAPEX SA
I. Country Overview
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Macroeconomic Indicators Main Macroeconomic Indicators for Argentina Source
2009
2010
2011
2012
2013
2014
Population, million persons
NSCI
40.13
40.79
41.26
41.73
42.20
42.67
GDP, current USD bn
NSCI
378.04
462.35
558.60
605.72
621.04
538.53
GDP (constant 2004 ARS bn)
NSCI
1,209.7
1,331.7
1,452.6
1,459.7
1,502.0
1,507.0
GDP Growth, %
NSCI
-0.48
10.08
9.08
0.49
2.90
0.33
Inflation (GDP Deflator), %
WB
9.88
17.51
17.20
18.06
18.21
-
Oil rents, % of GDP
WB
2.89
3.06
3.25
2.78
2.47
-
Annual average exchange rate, local/USD
WB
3.71
3.90
4.11
4.54
5.46
8.08
Comments In Q3 2014, Argentina's economy suffered from a decline in exports (by 8.4% on annual basis), imports (by 15.2%) and private consumption (by 4.7%). In early 2014, Argentina introduced a new inflation index, which measures prices nationwide. Prior to that, the index was based on Buenos Aires and the surrounding metropolitan area, which was not deemed credible by IMF. Statistics for 2015 show a decrease of the inflation rate in annual terms: from 18% in February to 16.5% in March.
Source: National Statistics & Census Institute, World Bank Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Macroeconomic Forecasts Macroeconomic Forecasts for Argentina 2015f
2016f
2017f
2018f
2019f
378.8
378.7
380.8
379.5
378.7
National currency per current international dollar, Implied PPP
5.2
6.3
7.8
9.5
11.8
Total investment, % of GDP
23.2
22.9
22.7
22.5
22.4
Volume of imports of goods and services, % change
1.4
3.0
2.5
2.7
3.0
Volume of exports of goods and services, % change
5.1
2.6
2.2
2.9
3.0
Unemployment rate, % of labor force
7.6
7.6
7.6
7.6
7.6
General government gross debt, % of GDP
58.2
55.3
55.8
54.7
54.2
Current account balance, bn USD
-2.01
-2.03
-2.07
-2.00
-1.82
GDP, current prices, USD bn
Real (2010) projected gross domestic product (bn USD)
517.6
531.2
548.2
567.4
588.7
610.8
633.7
657.4
682.1
707.7
Real Projected Gross Domestic Product Growth (%)
734.2 3.21
3.75
3.75
3.75
3.75
3.75
3.75
3.75
2.63
2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025f
2015f 2016f 2017f 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025f
-0.20
Source: World Bank, IMF Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
3.50
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Energy Sector Highlights Overview Argentina relies heavily on natural gas and oil, which comprise 51% and 35% of the primary energy mix respectively. The drop in oil prices in the end of 2014 relieved consumers in the country, but presented budgetary and investment challenges. The import and refining capacities in Argentina are at their maximum, catching up with rising consumption. Oil and gas revenues in the state budget have diminished significantly: in 2014, they accounted for about 3% of the budget revenues, as opposed to over 8% in 2008. Unconventional shale oil and gas reserves have already attracted investors’ interest.
Shale Prospects According to a global assessment conducted by the U.S. Energy Information Administration in 2013, Argentina has the second-largest technically recoverable shale gas reserves in the world (estimated at 22.7 trillion cubic metres) and the fourth-largest technically recoverable shale oil reserves (27 billion barrels). Even though Argentina is positioned among the most attractive countries in terms of the resource potential, the financial viability of these investments and reserve recovery efforts will depend on the prevailing domestic economic and regulatory conditions, as well as on the international market prices of hydrocarbon products.
Power Sector The electricity mix is dominated by thermal power. By the end of 2015, more than two-thirds of the electricity will be generated from oil-, gas- and coal-fired power plants. Hydropower is the second-largest power source. The government has expressed ambitions to expand its nuclear industry, indicating a national goal of 15-18% of nuclear power in the electricity mix by 2025. The country has potential to develop non-hydropower renewables, especially wind, but current policies do not point to any significant growth in the sector.
Source: BP, World Bank, EIA Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Shale Development Favorable Environment
Vaca Muerta Highlights
• Legislative support: The recent reform of the Hydrocarbons Law is expected to have a positive effect on the shale oil and gas sector by providing more fiscal and regulatory stability for the investors. There is a special type of concession explicitly for "unconventional hydrocarbon exploitation" with improved permitting terms.
• According to Morgan Stanley estimates, shale production costs per barrel of oil equivalent from the Vaca Muerta formation are USD 85. Only US production prices are lower.
• Easy geography: The Vaca Muerta field is located in an area where associated infrastructure for development and transportation of hydrocarbons is already available. Water stress in the region is low. The surface is relatively flat. This is beneficial for drilling efficiency and development costs.
• YPF is working on lowering drilling costs, with potential to reach a range of USD 4-7 million. Main drivers of cost reduction are the increasing scale (400 producer wells by year-end 2015), switch to ‘walking’ rigs to improve drilling efficiency, and acquisition of sand mines to replace expensive sand imports.
• With over 250 wells drilled in Loma Campana, costs have been reduced significantly, from USD 11 million to USD 7 million per well.
Recent Investments in Shale Oil & Gas Development Company
Year
USD mn
Terms
Chevron
2013
1,600
Petro AP
2010
500
Exploration (five years)
ExxonMobil
2010
250
Exploration in Vaca Muerta
Apache
2013
200
Drilling Vaca Muerta
Petrolera Pampa
2013
151
Development of tight gas in Rincon del Mangrullo block (Neuquen Province)
Shell Argentina
2013
500
Boosting Test Drilling in the Vaca Muerta
Dow
2013
120
16 shale gas wells in Vaca Muerta
Wintershall
2014
109
50/50 joint venture with Gas y Petroleo del Neuquen; exploration and drilling of up to six wells
First phase shale oil and gas development, drilling 100 wells in two fields in Vaca Muerta
Source: Reuters, BMI Research, Morgan Stanley, Company data Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Oil & Gas Rents as % of GDP Argentina Oil & Gas Rents, % of GDP
Crude Oil Reserves Long-Term Forecast, mn bbl
3,100.50
3,091.90
4.8 3,053.50 3,021.10 2.9
3.1
3.3
3.4 1.5
1.1
2008 2009 2010 Oil rents (% of GDP)
0.9
2.8
2.5
0.7
0.7
2,984.00
2.5 0.4
2019
2011 2012 2013 2014 Natural gas rents (% of GDP)
2020
2021
2022
2023
Comments Oil rents are a function of production output, international oil prices, and production costs. On the one hand, oil and natural gas production is has been decreasing, oil prices have been falling. On the other hand, production costs are either stable for conventional exploration, or still high for unconventional exploration.
Source: EMIS Insight estimate, World Bank, BMI Research estimate Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Primary Energy Consumption Primary Energy Consumption by Fuel, 2013
Energy Use Indicators, 2013
Total: 84.5 mn toe Natural gas 51.1%
Nuclear 1.7%
84.5
Energy use per capita, toe
2.04
Fossil fuel energy consumption, %
Hydropower 10.9%
Coal 0.8%
Energy use, mn toe
Renewables 0.8% Oil 34.8%
73.3%
Share of oil imported, %
12%
Energy imports (net importer), %
3.6%
CO2 emissions, total mn t
194.5
Comments Per capita energy consumption in Argentina is second largest in Latin America after Venezuela. The energy mix of the country relies heavily on oil and gas for respectively 35% and 51% of the primary energy mix. Hydropower is the main source of renewable energy. The energy sector in Argentina is regulated by the Ministry of Federal Planning, Public Investment, and Services.
Source: BP Statistical Review, World Bank Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Sector Forecasts Oil Sector Forecasts
Crude oil reserves, mn bbl
Comments
2015f
2016f
2017f
2018f
2019f
2,801
2,851
2,899
2,943
2,984
713
722.4
733
744.9
175.6
176.9
179.4
180.2
Crude, NGPL & other liquids production, 704.9 thou bpd Crude & other liquids net export, 175.4 thou bpd Crude oil refining capacity, utilisation %
84.0
85.2
86.5
87.8
89.6
Refined petroleum products production, thou bpd
585.9
595.5
605.3
615.2
628.1
Motor gasoline consumption, thou bpd
199.1
202.0
208.1
213.3
218.6
Natural Gas Sector Forecasts 2015f
2016f
2017f
2018f
2019f
313.6
332.9
371.0
408.1
444.0
Natural gas reserves to production ratio, years
7.9
8.2
8.9
9.5
10.1
Dry natural gas consumption, bn cub m
46.8
47.9
49.3
50.7
52.3
Dry natural gas net exports, bn cub m
-9.9
-10.0
-10.0
-10.0
-9.9
LNG net exports, bn cub m
-3.8
-3.9
-4.0
-4.3
-4.9
Natural gas reserves, bn cub m
Source: BMI Research, YPF Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Conventional oil fields are maturing, which puts pressure on oil and natural gas imports. Moderate forecasts for oil production growth may be revisited in view of shale oil exploration and development. Net exports of crude oil will increase gradually as production in unconventional oil plays expands. Argentina will maintain its position as a net importer of refined petroleum products, as refining capacities are at their maximum, and macroeconomic growth is expected to drive consumption at a rate faster than projected upstream development. Increasing investments in the Vaca Muerta field will boost natural gas production and decrease import demand, nonetheless the gas trade deficit will not be overcome in the next years.
II. Oil Sector
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Oil Sector Highlights Development The development of crude oil and natural gas resources in Argentina includes conventional onshore and offshore resources, as well as unconventional shale plays. Offshore development has been slowed down, as ENARSA – the state company that own all offshore resources – does not have enough financial and technical resources to develop them alone. The current low oil prices are also a factor to postpone shale oil and gas development, as the cost of oil production in the Vaca Muerta formation is estimated at USD 80-85 per barrel.
Reserves The proven oil reserves of Argentina were estimated at 2.8 billion barrels in 2013, and the technically recoverable shale oil reserves were estimated at 27 billion barrels. One of the most important deposits is the Vaca Muerta field, which requires significant investment in development. According to officials of YPF, the largest state energy company, developing 15% of Vaca Muerta would be sufficient to stop the need for energy imports. A number of foreign companies have already invested in exploration and test drilling.
Hydrocarbon Commission The Hydrocarbons Commission was founded in 2012 to address market asymmetries in the oil and gas sector, to encourage new exploration and production activities onshore and offshore, to expand oil refining capabilities, as well as to maintain adequate supply of fuel at reasonable prices. The Commission determines the reference prices for oil and gas. All companies in the sector must be registered in the National Hydrocarbons Investments Registry and must submit an annual investment plan for approval by the Commission.
Legislative Changes In October 2014, the Argentine government approved amendments to the 1967 Hydrocarbons Law, which is designed to attract private investment in the development of unconventional oil and gas resources and offshore deposits. The most important changes are: shortening the duration of exploration permits, providing export tax reliefs for concessionaires that invest more than USD 250 million over a three-year period, and restricting provincial governments from imposing new taxes. The exploitation period under a concession has been extended to 25 years for onshore conventional sources, 30 years for offshore resources, and 35 years for unconventional oil and gas.
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Proven Reserves of Crude Oil Proven Reserves of Crude Oil by Basins, 2009-2013, mn bbl 2009 2,511.5 45.9
2010 2,524.2 39.7
2011 2,478.2 32.2
2012 2,354.2 29.4
2013 2,333.9 28.7
39.1 1.0 5.7
32.1 1.0 6.6
24.3 1.4 6.5
23.4 0.8 5.2
23.4 0.7 4.7
Cuyana, including:
211.4
211.0
207.9
150.4
141.4
Mendoza Norte
211.4
211.0
207.9
150.4
141.4
631.0
592.8
534.1
510.9
494.4
127.5 335.0 105.8 62.7
113.9 301.2 61.9 115.9
116.5 263.3 61.7 92.6
105.7 255.0 89.6 60.7
100.6 262.0 72.7 59.0
1,537.4
1,596.1
1,622.6
1,583.9
1,584.1
1,082.6 454.8
1,101.0 495.0
1,092.3 530.2
1,057.1 526.8
1,052.7 531.5
85.8
84.6
81.4
79.6
85.2
21.2 12.6 13.8 18.5 19.6
18.5 14.6 14.6 17.3 19.6
17.5 13.3 13.2 15.7 21.8
13.9 17.9 9.8 15.6 22.4
14.1 18.2 15.0 14.3 23.6
Total for Argentina Noroeste, including: Salta Jujuy Formosa
Neuquina, including: Mendoza Sur Neuquén Río Negro La Pampa
Golfo San Jorge, including: Chubut Santa Cruz Norte
Austral, including: Santa Cruz Sur (on shore) Santa Cruz Sur (off shore) Tierra del Fuego (on shore) Tierra del Fuego (off shore) Estado Nacional Source: Ministry of Federal Planning, Public Investment and Services Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Production & Consumption Argentina Crude Oil Production & Consumption History, thou bpd 847
910
831
899
900
868
839
838
471
449
430
431
425
394
405
425
1999
2000
2001
2002
2003
2004
2005 2006 Production
Number of Active Rigs in Argentina, 2014-2015 113
101 95
103
105
107 107
104 105
104
813
523
772
535
2007 2008 Consumption
743
525
2009
722
687
665
656
571
585
613
636
2010
2011
2012
2013
Comments • Consumption of crude oil reached almost 650,000 bpd in 2013, following a slow and steady increase in the last decade. Maturing conventional oil fields have not been able to catch up with the growth in crude oil demand. Oil imports have been rising since 2009.
112 106 106
101
• Preliminary data for Q1 2015 estimates oil production at 5 million cub m.
94
• Since 2014, Argentina has witnessed an increase in exploration and drilling. Oil services firm Baker Hughes counted more than 100 operating rigs in the country. Source: BP Statistical Review 2014, OPEC Annual Statistical Bulletin 2014 Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Refining Capacity Refineries in Argentina as of December 2014
Major Products of Oil Refining, mn litres Capacity (thou bpd)
Refinery name
Owner
Campana
Axion Energy / CNOOC
87
Dock Sud
DAPSA
4
Lomas de Zamora
DAPSA
8
San Lorenzo
Oil Combustibles
50
Ricardo Eliçabe
Petrobras
31
Renesa
Refineria de Neuquen SA
3
Campo Duran
Refinor SA
32
Buenos Aires - Dock Sud
Shell
100
La Plata
YPF SA
189
Lujan de Cuyo
YPF SA
105
Plaza Huincul
YPF SA
25
2009
2010
2011
2012
2013
33,572
34,542
34,383
30,812
30,584
12,009
12,139
12,092
11,978
11,681
Automotive Fuels
6,035
6,150
6,854
7,302
7,610
Fuel-oil
3,219
2,811
2,123
2,390
2,336
Aerokerosene
1,599
1,316
1,275
1,681
1,670
Lubricants
281
349
329
311
312
Diesel-oil
119
46
15
20
36
Kerosene
14
55
45
25
27
Processed Crude Oil Gasoil
Comments National production of refined crude oil products has declined gradually by a total of 10% in the period 2009-2013. Refineries in Argentina operate at almost full capacity (>95%). The loss of production is attributed mainly to lower quality of oil and to lower efficiency in oil processing. While crude oil sales prices are declining in the international market, prices of refined products remain high, which makes imports expensive and leaves fueling stations with shortages of diesel. The government and YPF have planned investments to increase the refining capacity. YPF owns three refineries, holding 50.4% of the refining capacity in the country. Other large producers of refined crude oil products are Royal Dutch Shell, Axion Energy in partnership with China National Offshore Oil Corporation Ltd (CNOOC, China's top offshore oil producer), and Oil Combustibles. Source: Enerdata, Ministry of Federal Planning, Public Investment and Services Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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III. Natural Gas Sector
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Natural Gas Sector Highlights Reserves The main natural gas fields of Argentina are Neuquina, Austral, and Noroeste. According to data from the National Institute of Statistics, the three fields combined form about 85% of the natural gas production in Argentina. According to EIA’s assessment of shale gas resources worldwide conducted in 2013, Argentina’s reserves of technically recoverable shale gas is almost 60 times that of its current tested natural gas reserves. The most important reserve is in the Vaca Muerta formation (Neuquina Basin). The unconventional gas formation is found at depths between 2500 and 4000 metres, about 2 km below the water table.
Domestic Importance Natural gas is the main energy source in Argentina. It also generates more than half of the electricity in the country. In 2014, it was responsible for about 80% of the thermal electricity generation and 54% of the total electricity generation. Argentina is the largest natural gas producer in South America. Peak levels of natural gas output were reached in 2006, and production is declining ever since by 3% per year on average. The government is trying to match the lower local production and the peak winter demand through import agreements.
Trade Balance Argentina became a net natural gas importer in 2008. Gas imports have tripled since 2010, reaching 10 billion cub m in 2014. Pipeline imports are mainly from Bolivia, while LNG sources are multiple. Since 2009, Argentina has been receiving LNG at a floating terminal with capacity of 4 bcma at Bahia Blanca. A second LNG import terminal (5.8 bcma) started operation in 2011 close to Buenos Aires. Even with greater domestic supplies of associated natural gas production from the Vaca Muerta field, the country's gas trade deficit is expected to remain. LNG imports are expected to gain a bigger share in the total import balance, whereas pipeline gas imports are decreasing.
Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Proven Reserves of Natural Gas Proven Reserves of Natural Gas by Basins, 2009-2013, mn cub m 2009 378,818 61,846
2010 358,726 43,643
2011 332,511 33,644
2012 315,508 31,820
2013 328,455 30,029
61,594 42 210
43,369 40 233
33,357 51 235
31,648 34 138
29,873 34 122
Cuyana, including:
925
1 081
1 060
761
744
Mendoza Norte
925
1 081
1 060
761
744
157,610
161,529
145,295
133,699
138,742
7,381 141,935 4,866 3,428
6,981 143,524 5,055 5,968
6,592 128,125 3,126 7,452
4,711 117,391 7,888 3,710
5,876 121,112 7,507 4,247
44,397
45,917
48,559
48,446
48,314
32,151 12,246
32,803 13,114
34,002 14,557
33,467 14,979
33,311 15,003
114,040
106,557
103,953
100,781
110,626
13,320 10,213 18,535 23,226 48,746
10,994 10,704 14,662 21,514 48,683
9,930 10,107 14,507 19,821 49,589
8,471 8,786 11,328 20,338 51,858
8,532 9,009 12,994 18,876 61,215
Total for Argentina Noroeste, including: Salta Jujuy Formosa
Neuquina, including: Mendoza Sur Neuquén Río Negro La Pampa
Golfo San Jorge, including: Chubut Santa Cruz Norte
Austral, including: Santa Cruz Sur (on shore) Santa Cruz Sur (off shore) Tierra del Fuego (on shore) Tierra del Fuego (off shore) Estado Nacional
Source: Ministry of Federal Planning, Public Investment and Services Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Natural Gas Production & Consumption Natural Gas Production & Consumption History, bn cub m
45 35 32
1999
41
37 33
37
36
31
30
2000
2001
2002
35
2003
38
2004
46
46 42
40
2005
44
44
2006
Production
44
45
2007
2008
43
43
41
40
2009
2010
46
47
39
38
2011
2012
48
36
2013
Consumption
Comments According to YPF estimates, the natural gas consumption in Argentina was about 48.6 billion cub m in 2014. Approximately 8mn consumers were connected to gas distribution grids in in the end of 2014. Recent regulatory changes are related to giving absolute priority to domestic supply of gas at stable prices in order to sustain economic recovery. On days when a gas shortage occurs, the exports of natural gas and the provision of gas supplies to industries, power plants and fueling stations selling CNG are interrupted for priority to be given to residential consumers at lower prices. Preliminary data for Q1 2015 estimates natural gas production at 6.8 billion cub m. Source: BP Statistical Review, YPF, Argentina Energy Secretariat Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Natural Gas Imports & Exports Argentina LNG Imports by Country, 2013, bn cub m Rest of Europe 0.60 Qatar 0.88
Belgium 1.04
Natural Gas Net Exports Forecast, bn cub m 2015f
2016f
2017f
2018f
-6.2
-6.1
-6.1
-5.7
-3.8
-3.9
-4.0
-4.3
2019f
0
Norway 0.08
-1
Brazil 0.04
-2 -3
-5.1
-4
Egypt 0.16
-5 -6
Nigeria 0.51
-7 -8
Trinidad and Tobago 3.61
-4.9
-9 -10
LNG net exports
Pipeline gas net exports
Comments Argentina's natural gas exports have fallen significantly since 2007 because of the deficit in the domestic market. Net imports of natural gas for 2014 are estimated at 10.4 billion cub m. LNG imports accounted for about 54% of the total gas imports. They came mainly from Trinidad and Tobago (46%), Belgium 15%, Qatar 14% and Egypt 9%. LNG imports are expected to increase their share in the total import balance, whereas pipeline gas imports are decreasing. This is due to Argentina’s intention to decrease dependence on Bolivian pipeline imports.
Source: BP Statistical Review 2014, BMI Research Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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IV. Electricity Sector
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Electricity Sector Highlights Sector Development The electricity consumption in Argentina has been rising steadily over the last 5 years, following a swift recovery from the economic downturn in 2008. The main driver of consumption growth has been the residential sector, attributing for 2/3 of the total increase in electricity consumption between 2009 and 2013. Local generating capacities, however, have not been able to catch up with consumption.
Power Capacities The power capacities rely mostly on fossil fuels. Natural gas holds more than half of both generation and capacity, followed by hydropower and oilfired power plants. The nuclear, coal, and gas power plants work in a base-load regime as they secure the much needed power for the increased domestic demand.
Power Generation Total electricity generation in 2014 was 131 TWh, about 1% higher compared to 2013, according to Argentina's electricity market administration company Cammesa. In 2014, about 63.5% of the country's power generation came from thermal power plants, 31% from hydropower, 4% from nuclear power, and 2% from wind and solar. As much as 1.1% was imported from Uruguay and Paraguay.
Low-Carbon Power Currently, only a small part of Argentina's total electricity consumption is produced by nuclear, hydropower, and renewables. Other renewable energies include the production of biofuels for transportation use. The country has adopted a series of new laws to promote renewable energy sources. Law 26190 declares the production of electricity from renewable energy sources a matter of national interest. It requires that 8% of all electricity consumed nationally must be generated from renewable energy sources by 2017.
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Installed Power Capacities & Supply Installed Power Capacity, 2014
Power Supply, 2014
Total: 37.6 GW
Total: 131 TWh
Hydropower 28.5% Hydropower 31.0%
Non-hydro renewables 2.2%
Nuclear 4.0% Imports 1.1% Non-hydro renewables 0.5%
Nuclear 4.5%
Thermal (natural gas, oil, coal) 63.5%
Thermal 64.9%
Comments Argentina's power sector faces challenges due to high reliance on hydrocarbons, ageing generating capacities and distribution networks, and lack of adequate financial resources for upgrades and renovations. Natural gas is the leading component in the thermal power generation (about 80% in 2014), followed by oil and coal with 16.5% and 3.5%, respectively. Argentina has transmission network connections with Brazil, Chile, Paraguay, and Uruguay. In 2014, imports were about 1.4 TWh, the majority of them came from Uruguay. With increasing domestic power demand, power exports have been decreasing in the last several years, reaching almost zero levels in 2013 and 2014. Source: BMI Research, Cammesa Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Generation & Consumption Electricity Generation & Consumption, TWh
122 100
93
106
99
109 98
126
122
114 104
118
122
117
130
128
135
132
Electricity Consumption by Consumer Type, TWh 139 5.5
100
136
5.7 5.3
80
5.1 2.8 3.4
3.0 3.5
3.2 3.8
3.6 3.8
2005
2006
2007
2008
Production
2009
2010
2011
2012
3.6 4.0
Other (incl. waterworks) 36.9
2004
6.0
37.4
35.9
2013 31.1
Consumption
Government
34.3
Street Lighting
60
Comments • Slow economic growth will limit electricity consumption, so the power consumption growth rate is expected to be around 2% in the next couple of years. This is relatively low, compared to Argentina's potential and neighbouring countries.
40
18.2
18.4
19.4
Industrial
Commercial
• Power supply adequacy is expected to improve with additions of power capacities and improvements in the rates of distribution losses.
20
• Argentina's main electricity trading partners are Brazil, Uruguay and Paraguay. By end-2015 the country will start imports from Bolivia as well.
31.3
33.2
35.1
2009
2010
2011
37.3
38.9
2012
2013
0
Source: BP Statistical Review 2014, Ministry of Federal Planning, Public Investment and Services, BMI Research Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
17.4
19.0
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Residential
Low-Carbon Electricity Generation History Low-Carbon Electricity Consumption by Fuel, TWh 60 50
0.7
0.5
40 0.1
0.1
1.1
0.8
0.5
1.3
1.4
3.0 3.0
3.0
37.7
37.3
2.3
2.3
2.9 2.8
0.6
0.4
30 20
3.0 1.0
33.2
32.6
41.9
41.5
39.1
34.1
35.5
39.6
43.4
40.7
28.3
28.6
26.0
8.2
7.1
7.5
8.0
7.5
7.1
6.2
7.1
5.8
7.6
7.9
6.9
7.5
7.1
7.2
8.0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
26.8
40.6
40.7
39.6
37.0
7.0
5.9
6.2
6.0
2010
2011
2012
2013
10 0
Nuclear
Hydro
Other RES
Comments Currently, only a small part of Argentina's total energy consumption is produced by nuclear, hydropower, and renewables. The National Scheme to Encourage the Use of Renewable Sources for Electricity Generation (Law 26190, 2006) has established a legally binding target of 8% renewable energy in the final energy consumption by 2017. This law also introduced several incentive schemes for the development of renewable energy projects. Argentina has more than 100 hydroelectric power plants, three of them provide more than 50% of the hydroelectric power.
Source: BP Statistical Review Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Renewable Energy – Capacities & Generation Wind Power Capacities, 2013, MW
Solar Power Capacities, 2013, MWp
Region
Power plant
Capacity (MW)
Chubut Chubut Chubut La Rioja Chubut Chubut Buenos Aires Rest of Argentina Total
Wind Park Rawson I Wind Park Rawson II Wind Park Loma Blanca 4 Wind Park Arauco Wind Park Diadema Wind Park El Tordillo Wind Park Necochea Other wind parks
48.6 28.8 50.0 25.2 6.3 3.0 0.25 27.83 189.98
Power plant
Capacity (MWp)
San Juan
Canada Honda I y II
5.00
San Juan
Chimbera I
2.00
San Juan
San Juan I
1.20
Rest of Argentina
Other solar capacities
0.03
Total
Wind Power Generation by Wind Park, 2013, GWh Rawson II 108.7
Region
Solar Power Generation by Solar Park, 2013, GWh
Loma Blanca IV 71.1
Chimbera I 2.6 Arauco 57.8 Canada Honda I y II 10.1
Diadema 26.3
Rawson I 180.8
Other 16.5
San Juan I 2.3
Other solar capacities 0.1
Source: Ministry of Federal Planning, Public Investment and Services Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
8.23
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V. Main Players
Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Top Oil and Natural Gas Producers Top 10 Crude Oil Producers in Argentina, 2014 #
Operator
Top 10 Natural Gas Producers in Argentina, 2014 mn bbl
#
Operator
mn cub m
1
YPF S.A.
79.70
1
YPF S.A.
11.86
2
Pan American Energy (Sucursal Argentina) LLC
36.07
2
Total Austral S.A.
11.63
3
Pluspetrol S.A.
13.38
3
Pan American Energy (Sucursal Argentina) LLC
4.76
4
Sinopec Argentina Exploration Inc
11.64
4
Petrobras Argentina S.A.
3.31
5
Petrobras Argentina S.A.
8.52
5
Apache Energia Argentina S.R.L
1.39
6
Chevron Argentina S.R.L.
7.30
6
Tecpetrol S.A.
1.23
7
Tecpetrol S.A.
7.01
7
Pluspetrol S.A.
1.10
8
Petrolera Entre Lomas S.A.
4.54
8
Petrolera LF Company S.R.L
1.08
9
Compañias Asociadas Petroleras S.A.
4.01
9
Pluspetrol Energy S.A
0.93
3.76
10 Enap Sipetrol Argentina S.A.
10 Total Austral S.A.
0.82
Others
18.31
Others
3.37
Total Production of Argentina
194.23
Total Production of Argentina
41.48
Source: Argentine Petroleum and Gas Institute Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Yacimientos Petrolíferos Fiscales (YPF) YPF Income Statement (Consolidated, ARS mn) 34.9%
8,849
40,147
5,079
22,593
90,113 3,902
16,184
67,164
2012
114,942
25.1%
24.1%
2013
Net Revenues
EBITDA
2014 Net Profit
EBITDA margin
YPF Balance Sheet (Consolidated, ARS mn) 0.93
2013 Shareholders' Equity
39,547
72,781
208,554 21,177
135,595
12,357
31,260
79,949
2012 Total Assets
48,240
0.82
0.73
1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00
2014 Net Debt
Net Debt/EBITDA
Source: Company data Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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YPF is the largest oil and gas producer in Argentina. The company was majority owned by Spain’s Repsol from 1999 until the Argentine government seized 51% of YPF shares after the adoption of the Expropriation Law in May 2012. After a two-year dispute, Repsol accepted USD 5 billion compensation (Feb. 2014), and sold almost all of its remaining stake for USD 1.3 billion (May 2014). YPF operates a fully integrated oil and gas chain with leading market positions across the domestic upstream and downstream segments. In 2014, YPF had a 41% share of the total oil production and a 28.6% share of the total gas production in Argentina. In recent years, values from export revenues have decreased and amounted to 17.1%, 13.3% and 11.5% of the consolidated net sales revenues in 2014, 2013 and 2012, respectively. In February 2014, YPF bought Apache Energia Argentina srl from Apache Corporation for USD 800 million in cash. At the time of writing this report, YPF and Gazprom are negotiating an agreement for joint exploitation of shale oil and gas in the Vaca Muerta fields.
Pan American Energy (Sucursal Argentina) Pan American Energy LLC (Consolidated, ARS mn) Pan American Energy (Sucursal Argentina) LLC is the second largest oil producer and the third largest gas producer in Argentina.
57.7%
2012 EBITDA
Pan American is controlled by BP Plc, while Argentina's Bridas Holdings holds a 40% stake.
2,486
16,686
1,387
5,156
12,330
3,153 7,647
13,252
2011 Net Revenues
7,938
47.6%
41.8%
The company operates in the four main basins in Argentina: Golfo San Jorge, Noroeste, Neuquina and Marina Austral. In 2014, it accounted for 17% of the hydrocarbons produced in Argentina.
2013 Net Profit
EBITDA margin
Pan American LLC Balance Sheet (Consolidated, ARS mn)
The total amount of investments of the company in Argentina for 2001-2014 amounted to more than USD 11 billion.
2.39 2.09
2011 Total Assets
2012 Shareholders' Equity
As of 2014, the company had reserves of oil and gas equivalent to 1.4 billion bbl and a reserves-to-production ration of 18 years.
16,552
24,852
47,429
12,326
16,524 9,657
32,856
13,825 27,791
1.26
In 2013, company exports totaled USD 1.5 billion.
2013 Net Debt
Net Debt/EBITDA
Source: Company data Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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The company has witnessed improving results for 2012 and 2013 in terms of revenues, EBITDA, and net profits.
Petrobras Argentina S.A. Petrobras Argentina Income Statement (Consolidated, ARS mn) 23.3%
23.1%
2012
2013
Net Revenues
EBITDA
Petrobras Argentina S.A. (PESA) is the Argentina-based subsidiary of Petróleo Brasileiro S.A. (Petrobras). The company is engaged primarily in the oil, gas, petrochemical, refining and electricity businesses. 0,578
3,880
20,738 0,852
3,545
15,340
0,673
2,973
12,765
18.7%
Petrobras Argentina S.A was the fifth largest oil producer and the fourth largest gas producer in Argentina in 2014.
2014 Net Profit
Petrobras Energia S.A. is one of the principal private energy companies in the South Cone.
EBITDA margin
Petrobras Argentina Balance Sheet (Consolidated, ARS mn) The company had a 4.3% share of the oil production and an 8% share in gas production.
2.46
2.36
2.25
2012 Total Assets
2013 Shareholders' Equity
As part of the Petrobras divestment plans for 2015-2016, Petrobras Argentina sold all of its assets located in the Austral Basin to Compania General de Combustibles S.A. for USD 101mn.
9,539
12,615
24,432
7,974
11,695
20,862
7,016
10,571
18,847
The company is listed in Buenos Aires Stock Exchange and is part of Merval Index.
2014 Net Debt
Net Debt/EBITDA
Source: Company data Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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Companias Asociadas Petroleras SA (CAPEX SA) Companias Asociadas Petroleras SA (Consolidated, ARS mn)
-225
-83 Apr 2012
Apr 2013
Net Revenues
EBITDA
CAPEX SA is a producer of electricity with operations in Southern Argentina. The company has been a power producing company due to its large discoveries of natural gas in 1991, which coincided with the liberalization of the country’s electricity sector.
477
295
20
25.8%
41.3%
816
715
191
742
58.4%
Apr 2014 Net Profit
The main activities of the company include the exploration and exploitation of oil and gas, and the production, distribution and marketing of propane, butane and gasoline, generation and sale of electricity.
EBITDA margin
Companias Asociadas Petroleras SA (Consolidated, ARS mn) 6.69
The company was the ninth largest oil producer in Argentina in 2014 with a total production of 4.01 mn bbl.
5.48
Apr 2012 Total Assets
Apr 2013 Shareholders' Equity
The main risks for the company are related to the depletion of its oil and gas reserves. If it does not manage to get new fields, its own gas supplies share in power production may diminish.
2,141
180
2,456
1,617
180
2,120
1,280
180
1,583
4.49
Apr 2014 Net Debt
Net Debt/EBITDA
Source: Company data Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
- 32 -
Contact: Corporate Headquarters 6-8 Bouverie Street London EC4Y 8DD UK Voice: +44 20 7779 8100 Fax: +44 20 7779 8224
Americas Headquarters 225 Park Avenue South New York, New York 10003 US Voice: +1 212 610 2900 Fax: +1 212 610 2950
Asia Headquarters Eucharistic Congress Bldg. No. III 4th Floor, 5 Convent Street Mumbai 400 001 India Voice: +91 22 22881123 Fax: +91 22 22881137
Disclaimer: The material is based on sources which we believe are reliable, but no warranty, either expressed or implied, is provided in relation to the accuracy or completeness of the information. The views expressed are our best judgment as of the date of issue and are subject to change without notice. EMIS and Euromoney Institutional Investor PLC take no responsibility for decisions made on the basis of these opinions. Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved. A Euromoney Institutional Investor company. About EMIS Insight EMIS Insight is a unit of EMIS that produces proprietary strategic research and analysis. The service features market overviews, industry trend analysis, legislation and profiles of the leading sector companies provided by locally-based analysts. About EMIS Founded in 1994, EMIS (formerly known as ISI Emerging Markets) was acquired by Euromoney Institutional Investor PLC in 1999. EMIS works from over 15 offices around the world to deliver electronic information products, by subscription, to institutional customers globally. EMIS provides hard-to-get information covering more than 100 emerging markets. Its flagship products are EMIS Intelligence and EMIS Professional. EMIS clients include top investment banks, corporations, law firms, consultants, investment and insurance companies, universities and libraries, multilateral organisations, and others.
Any redistribution of this information is strictly prohibited. Copyright © 2015 EMIS, all rights reserved.
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