CHAIRMAN & PRESIDENT OF BRIDAS CORP.
Argentina 2017 I Economy I Leader
BIOGRAPHY Born in Rufino, Santa Fé province in Argentina, he obtained a degree in industrial engineering at the University of Buenos Aires. He is Chairman & President of Bridas corporation, Honorary Chairman of Pan American Energy and Chairman & CEO of various companies owners of vineyards & wineries across four continents.
“ARGENTINA IS A GOOD PLACE TO INVEST, IT HAS RESTORED THE INVESTORS’ CONFIDENCE. THE CURRENT ADMINISTRATION HAS TAKEN THE RIGHT STEPS IN THIS DIRECTION AND THIS WILL HELP ARGENTINA RE-ENTER THE GLOBAL MARKET.”
AXION ENERGY HAS BEEN ONE OF THE FASTEST GROWING COMPANIES IN ARGENTINA. CAN YOU TELL US MORE ABOUT THE COMPANY’S BACKGROUND AND STRATEGY FOR EXPANDING ITS REFINERY AND SERVICE STATION NETWORK?
AXION energy is developing an ambitious plan to expand and modernize its refinery in Campana, province of Buenos Aires. This is the most important project in the refining sector in Argentina in the last thirty years. So far, we have applied USD 800 million of the USD 1.5 billion planned to invest. As a result, the refinery has increased its fuels production by 10%; with estimates of reaching an incremental target of 60% by project completion. Moreover, the project – which has created employment for 700 people – will employ more than 2,000 people during the expansion’s peak. We continue maximizing our brand identity in service stations which operated under the ESSO brand. So far, of the 580 service stations throughout the country, more than 300 are already operating under AXION. Finally, considering the downstream industry today, we continue working to be increasingly more efficient, with more quality products and to maintain reasonable profit margins in such a competitive market.
PAN AMERICAN ENERGY WILL INVEST USD 1.2 BILLION IN ARGENTINA IN 2017. WHAT ARE THE MAIN PRIORITIES FOR THE COMPANY IN THE COUNTRY?
At Pan American Energy we focus on optimizing the activity of the conventional hydrocarbons reservoirs in Golfo San Jorge, mainly in Cerro Dragón, the largest oilfield in the country. We also seek to increase production in the Neuquina Basin, to promote the development of unconventional hydrocarbons. We will also support the growth of the main offshore gas development in the country, in the Marina Austral Basin, where we are one of the partners. I am extremely pleased with Pan American Energy’s achievements over the past 20 years; we are strongly committed to the country and to communities where we operate. During this period, we have invested more than USD 14 billion, not only to increase oil and gas production, but also to increase the country’s hydrocarbons reserves.
IN YOUR OPINION, WHAT IS THE IMPORTANCE OF VACA MUERTA FOR THE FUTURE OF THE ENERGY SECTOR IN ARGENTINA AND WHAT ROLE DO YOU EXPECT PAN AMERICAN ENERGY TO PLAY IN ITS DEVELOPMENT?
We have been active in the province of Neuquén for more than 50 years, first with Bridas, then with Pan American Energy. We always knew about the existence of the Vaca Muerta Geological Formation and its potential. We understand that the conditions for its development are ripe now thanks to the state-of-the-art technology available and to President Macri’s determination to support the establishment of productivity agreements with the unions aimed at lowering the production costs, while taking into account sustainable development. The incentives for unconventional gas prices are also important in order to increase production. These incentives have had excellent results in the past showing that local production can grow when the scenario is predictable.
Pan American Energy has invested more than USD 1.2 billion over the last 5 years to develop unconventional reservoirs through ambitious campaigns with tight gas and shale targets. In one of our main blocks, Lindero Atravesado, our tight gas production has increased sevenfold, and we have reduced well costs by more than 50%. We recently announced an investment of approximately USD 500 million over the next 4 years in the Aguada Pichana Oeste and Aguada de Castro blocks, within Vaca Muerta. Even though we need to research the formation’s geology more in depth and further reduce costs, I am very optimistic about the success of Vaca Muerta.
BEING ONE OF THE MOST IMPORTANT BUSINESSMEN IN THE COUNTRY, WHAT IS YOUR PERSPECTIVE FOR THE FUTURE OF ARGENTINA´S ECONOMY AND WHICH SECTORS DO YOU CONSIDER TO BE ATTRACTIVE TO FOREIGN INVESTORS?
President Macri has taken the correct measures which have improved Argentina’s macroeconomic outlook, so that our country can attract foreign investors. Of course, there are always things that can be improved, but you cannot address all the problems simultaneously and in such a short time. Today, Argentina is a country which offers credibility, and has clear rules. The agribusiness, mining and energy sectors are very attractive to foreign investors. Lately also the technology sector has presented interesting business opportunities.
WHAT WOULD BE YOUR FINAL MESSAGE TO FOREIGN INVESTORS THAT ARE INTERESTED IN INVESTING IN ARGENTINA?
That the only way to grow is to invest. We have been investing for more than 50 years. We had good times and bad times, but we have always thought of the long-term. Argentina is a good place to invest, it has restored the investors’ confidence. The current administration has taken the right steps in this direction and this will help Argentina re-enter the global market.