Economy Minister Sergio Massa on Tuesday launched a differential dollar for oil and gas exporters from the Vaca Muerta basin in the quest for US$1.2 billion to boost reserves and trim the possibilities of exchange rate tensions in the lead-up to the general elections.
The export incentive programme, dubbed the ‘Dólar Vaca Muerta’ by analysts, will operate on the same basis as the latest version of the so-called 'Dólar Soya' or ‘Soy Dollar – i.e. not granting a higher exchange rate directly but permitting 25 percent of exports to be cashed at the CCL (contado con liquidación) exchange rate while the remaining 75 percent will use the official exchange rate (Mercado Único Libre de Cambios, or MULC). That equation will result in more convenient prices for exporters.
Massa’s aims here are clear to analysts: to boost the reserves of a Central Bank in the red, over and above the latest International Monetary Fund (IMF) remittances, and stabilise financial dollars to face, with the greatest calm possible, the closure of the electoral process and the final stages of the Alberto Fernández Presidency.
Economic analyst Natalia Motyl agreed that "the government seeks to boost the reserves of the Central Bank and keep a lid on financial dollars … to halt, if needed, a run on the peso in the midst of the general elections."
"Today the greatest worry is that the electoral atmosphere and the arrival of a new government do not increase the pressure on money markets, transferring it to prices and more inflation," she told Perfil in an interview.
For Camilo Tiscornia, director of C&T Asesores Económicos, the new programme announced by Massa "is a direct continuation of the ‘Soy Dollar’," applicable to the farming sector, and which "seeks, with winter over and the [Néstor Kirchner] gas pipeline functioning, to provide an incentive to cash dollars before the elections."
Massa met oil executives from the fossil fuel basin such as YPF, Tecpetrol, Pampa Energía, Pan American Energy, among others, before making the announcement.
On Wednesday Massa visited Vaca Muerta works in Neuquén, together with the local Governor Omar Gutiérrez and the governors-elect Rolando Figueroa (Neuquén) and Alberto Weretilneck (Río Negro).
The minister explained that "reaching the October elections with stability in financial dollars" was being sought.
"It cannot happen twice. You learn from the errors," Massa told them in allusion to the sharp effect of the August 14 devaluation of the peso on inflation.
Massa highlighted "the production and investment records for gas and oil" in Argentina.
He further said: "With the [PASO primary] result there was some thought that uncertainty would halt the sector but we do not want to stop creating jobs and perforating to produce. Today we took the decision to recognise 25 percent of exports and bring investment into Argentina via contado con liqui [CCL] to guarantee stability in jobs, public works and the financial system."
The minister, together with YPF president Pablo González, toured the start of the Vaca Muerta Norte oil pipeline, which will come on stream next month, permitting a 50 percent increase in the capacity to transport crude in the basin. The pipeline is 150 kilometres long with a daily transport capacity of 160,000 barrels.
The work also includes the biggest tank yard constructed in Vaca Muerta to do with two units of 170,000 barrels in capacity, which can be increased in a second stage. Each tank is 60 metres wide, approximately equivalent to half a professional football pitch, and may load the equivalent of 1,000 Olympic pools.
The oil pipeline extends from YPF’s central development zone in Vaca Muerta (Loma Campana/La Amarga Chica/Bandurria Sur) to Puesto Hernández, in Rincón de los Sauces, from where the export of crude to Chile can be boosted via the Oleoducto Trasandino across the Andes, as well as increasing the supply of light oil to the refinery in Luján de Cuyo, Mendoza, optimising fuel deliveries to all the central and northern zones of the country.
The oil pipeline will be set in motion next month, expanding by 50 percent the current capacity of oil transportation to the Neuquén Basin and maximising the export potential to Chile, thus permitting more dollars to enter the country.