Argentina watch: Offshore seismic consultation, biofuels prices

Argentina’s environment ministry plans to hold a public consultation next month on a proposed offshore seismic data acquisition campaign.

The focus will be on environmental impact study documentation corresponding to the project, which targets Argentina Norte basin area CAN-102, jointly held by Norway’s Equinor and Argentine state oil firm YPF.

The consultation is due to be held online from 9.00am local time on December 19, via YouTube, the ministry said in a resolution in the official gazette. 

Last month officials held a public consultation on proposed exploration well Argerich-1, planned for area CAN-100, jointly held by Equinor, YPF and Anglo-Dutch firm Shell.

An injunction, filed over environmental impact concerns, is currently in place halting exploration work at three basin blocks: CAN-100, CAN-108 (Equinor) and CAN-114 (Equinor-YPF). A court established a set of environmental study-related requirements that need to be met.

Argentina held its first offshore licensing round in more than 20 years in 2019. Eighteen blocks were awarded to 13 companies, among them ExxonMobil, Total Austral, Equinor, BP, Eni and Mitsui. Winning bidders presented environmental impact studies in 2020 and the combined committed exploration investment was US$720mn. Equinor's plans are the most advanced.

According to a YPF presentation, Argentina has 31Bboe (billion barrels of oil equivalent) potential offshore hydrocarbons resources, compared with the estimated 29Bboe in the onshore Vaca Muerta unconventional formation. 

Hydrocarbons, chiefly gas, are currently produced offshore Tierra del Fuego province in the Austral basin, where a consortium recently announced a final investment decision on the US$700mn Fénix production project. 

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Argentina’s federal energy department has raised the price of bioethanol that is used for blending with gasoline.

In a resolution Thursday, the department set a price of 118 pesos (US$0.71) a liter for ethanol produced from sugarcane in transactions from November 3. 

Ethanol produced from corn was set at the same price, which also came into force from November 3.

The price will remain in place until the next update, the department said in a resolution.

Officials had previously hiked it around the start of the month.

Annual inflation was running at 88% in October, according to data from statistics agency Indec. 

The government introduced a biofuels law in 2021 and later published associated secondary legislation to guide its implementation. More secondary legislation governing the implementation of the law was recently introduced. Via resolution, authorities created a registry of biofuel producers, blenders, traders and storage players. Officials also introduced biodiesel and bioethanol classification parameters, outlined what usage cases do not require, by law, blended fuels, and called for the creation of a biofuels commission tasked with analyzing projects and proposals, among other functions. 

The biofuels law, in force until end-2030, was branded a promotional regime by the government, with some quarters of the biofuel industry criticizing it as damaging to the sector.