Miguel Galuccio: “Nobody comes to invest in a country and then not take the return”

The founder, president and CEO of Vista, Miguel Galuccioparticipated today in the 5th Annual Conference of the Center for the Evaluation of Evidence-Based Policies (CEPE) of the Torcuato Di Tella University (UTDT) to talk about the energy transition and left several definitions about the economic situation in general in Argentina.

In a one-on-one conversation with the economist Eduardo Levy Yeyatidean of the School of Government of the UTDT and academic director of the CEPE, Galuccio indicated that it is difficult to attract investments for Argentina with an exchange rate trap that prevents the repatriation of dividends or pay debts in foreign currency.

“Climate change is being addressed from politics, where the story beat reality. This is feasible and it is a fact, because when you look at what we have achieved in recent years with respect to climate change, There have been no concrete advances. In Europe, in some cases, we are going backwards”, criticized the former president of YPF.

In this sense, he left a question: “By 2050, energy consumption will doubleby economic development and demographic expansion. Supply must be created to cover the growth in consumption. Carbon today accounts for 25% of supply and in turn we have to double it. How do we go about completing that? gap?”.

And he added: “The story was faster than reality, because one of the fundamental sources of energy is oil and gas. In the last seven years we decided that we were not going to invest enough in the development of oil and gaswhich affected the price of the raw Materials”.

For Galuccio, the main loser in all this was Europe, where electricity and gas prices are seen to be “unsustainable”. Likewise, he indicated that gas is currently worth US$35 per million BTU (English measure used in the sector), while there are industries that with costs of US$10 or US$15 do not work, they merge.

“Europe is looking to have a deindustrialization, while the United States and the countries that have the hydrocarbon are the winners”, he indicated.

Therefore, he said, we must “have a program that allows us to be realistic in how we move to slow global warming.” And he pointed out that hydrocarbon plays an important role and also the policy of changing consumption habits.

He then referred to the financial community, which invests in companies that have a sustainable goal and requests programs and reports on a frequent basis on the fulfillment of those objectives. “There is a vocation to attack this problem,” she said. However, he warned that In Argentina “we do not have policies to encourage that direction, they only talked about putting taxes on carbon emissions.”

“That’s the stick, what’s the carrot?” asked Levy Yeyati.

“A prize or export benefits could be given, for example, to those companies that adapt faster to the objectives set, but we lack vision,” answered Galuccio.

In this sense, he indicated that Argentina is falling short in infrastructure due to the growth in production, both in gas and oil. “The other point is the inability to bring in money from abroad to invest and have a macro that allows us to get that money out. No one invests in a country at a global level and then does not get the return. We have the inability, in part, to pay a debt in dollars or to distribute dividends,” he criticized.

Galuccio said that it is not an ideological problem, but that “There is a lack of dollars in the Central Bank and we do not have a formula that allows us to come out on top.” As an example, he referred to the United States in 2015. “There is no country in the world that pays more attention to energy than the United States. For them, not having energy is a catastrophe. Barack Obama, in 2015, with the appearance of the shale gas decided to raise the barrier to export, being a country that lacked energy. With that he generated the inversion effect. Today it is an exporting country, with a lapse of less than seven years”, he counted.

“Do you have to bet on the reaction of the offer?” asked Levy Yeyati.

“You have to go upstairs”answered the CEO of Vista, and recounted that a global oil services company it has US$300 million dollars “trapped in Argentina, which cannot be repatriated”. And he added: “That only happens in Argentina and Mozambique of all the countries where it operates”.

Finally, he concluded: “You have to think big or go out on top. Today we are crazy seeing how to build a gas pipeline. Then we have to build a liquefaction plant, which requires US$4,000 or US$5,000 million, which has to come to Argentina. It is complicated in the Argentine context for that money to come. In addition, it takes four years to build it. Then we are going to transport the gas, spend energy to liquefy it, put it on top of a ship, take it to Europe, and regasify it there, and then transport it again. It would be easier to bring the industry to Argentina, Then there is the environmental point of view. It would be much better for the world. It is much greener than taking the gas to Europe”.

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