CHAIRMAN OF PAN AMERICAN ENERGY GROUP
Argentina 2018 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 the Chairman of Pan American Energy Group, Director & Chairman of Beusa Holdings Inc. and owner of Alejandro Bulgheroni Family Vineyards, a collection of quality-focused wineries located in some of the world´s top wine regions.
“PAEG HAS BECOME ARGENTINA’S LARGEST PRIVATELY-OWNED INTEGRATED ENERGY COMPANY, RESPONSIBLE FOR 22.000 JOBS AND A TURNOVER OF OVER $7 BILLION.”
THE CREATION OF PAN AMERICAN ENERGY GROUP REPRESENTS A NEW STAGE IN THE COMPANY´S BUSINESS. CAN YOU TELL US WHAT THE PROCESS WAS LIKE AND WHAT THIS MEANS FOR YOUR SHAREHOLDERS?
We have been investing in Argentina and in the region for the past 60 years. Our story started with Bridas that grew into a very diversified oil and gas company. In 1997, Pan American Energy was born out of the merger of Bridas and Amoco (later on acquired by BP). Over these 20 years, thanks to our shareholders´ efficient investing and our employees’ hard work, we have positioned Pan American Energy as the company with the highest growth in hydrocarbon production and the best reserve replacement ratio in Argentina.
In 2010, the Chinese company CNOOC became a 50% partner in Bridas and two years later we acquired ESSO´s downstream assets in Argentina, Uruguay and Paraguay, giving birth to Axion Energy. We have built a strong, solid group that successfully combines three very different cultures: British, Chinese and Argentine. Today the company is much bigger than it was in 1997 and has consolidated its role as a key player at the regional level. A clear example of this is our presence and recent investment in Mexico, where we became the first international operator to drill in the country after the Energy Reform approved by the Government of Mexico.
We took yet another step by the end of 2017 when, together with our partners BP and CNOOC, we consolidated our participation in PAE and Axion Energy in a new integrated energy company, Pan American Energy Group. This integration not only ratifies our commitment to continue growing and investing in Argentina and in the region, but it also means that the interest of the partners will converge in a new, single company. The creation of Pan American Energy Group - the main privately-owned producer, employer and investor of the energy sector in the region- will bring together the strengths and knowledge of the partners to consolidate the company as a world-class operator that seeks to achieve sustainable energy development.
NOW INTEGRATED WITH PAN AMERICAN ENERGY, WHICH WILL BE THE DOWNSTREAM STRATEGY OF AXION ENERGY?
In just five years, Axion Energy has become one of three most important players in the downstream sector in Argentina. Next year, the company expects to complete the expansion and modernization of its refinery in Campana, in the province of Buenos Aires, a project with a total projected investment of 1.5 billion dollars. Once completed, the refinery will have increased its processing capacity from 90,000 to 120,000 bbl/d.
With this project, the company will be able to refine more and better fuels, with lower sulphur content. We are immensely pleased with this initiative, the most important project ever undertaken in the refining sector in the country in the last 30 years, which will eventually help reduce gas emissions and improve the refinery´s energy efficiency. We are also growing in the retail sector. Since 2013, we have added net 85 service stations to the Axion network, to a total of 789 the company has in Argentina, Uruguay and Paraguay.
WHAT IS YOUR PERSPECTIVE FOR THE FUTURE IN THE COUNTRY AND THE ENERGY BUSINESS IN ARGENTINA?
During the last two and a half years President Macri has implemented financial and political measures that have allowed Argentina to re-enter the global market and start the journey to reduce inflation and to a more open economy. Today, we can become part of the world again and do so in a smart way. In this vein, being the hosts of the G20 Summit this year is extremely important for our country. I see a lot of opportunities to invest in the country in many different sectors. Though the energy sector looks like the most active and promising one. We need very important investments in the development of the unconventional hydrocarbon fields and in the infrastructure needed to make it possible. Alternative energies production and transportation projects are also interesting fields to look at.
Argentina needs to keep developing its unconventional reservoirs, especially Vaca Muerta. We understand that the conditions are ripe now; unlike many years ago, technology enables us to drill this rock more effectively and efficiently than before. In my opinion, Vaca Muerta poses two challenges: firstly, to obtain the productivity we need of the wells that are drilled; secondly, to make the investment costs as low as they are in other parts of the world. There are a lot of investment opportunities in the energy sector and we will continue to bet on them, proof of that is the investment budget for 2018 of $1.860 million in PAEG upstream and downstream projects.