Vista Eyes Milei Reforms in Bid to Double Vaca Muerta Output
(Bloomberg) --
Vista Energy SAB, one of the top drillers in Argentina’s burgeoning shale patch, sees another round of reforms from Javier Milei as a trampoline to growth after the libertarian president notched a decisive win in midterm elections.
“Deregulating the market — having less tax, better laws, more flexibility — could help us be more competitive,” Chief Executive Officer Miguel Galuccio told Bloomberg Television from Buenos Aires. “Being more competitive means more investment, more production, more exports, more proceeds for the country.”
Earlier Wednesday, Vista presented an investment plan for the next five years. Galuccio — who led the first incursion in the Vaca Muerta shale region more than a decade ago — said the company is aiming to surpass the equivalent of 200,000 barrels of oil a day in 2030, almost doubling this year’s output of 114,000.
At the investor event, Galuccio said the industry needed to scale up to bring down drilling costs that are about one third higher than in the US Permian Basin, home to a remarkable shale boom that Vista and its peers are trying to emulate. To help achieve that, “there’s a lot of discussion going on” with the Milei administration to double down on deregulation reforms.
Galuccio mentioned cutting taxes on exports as an area being explored in talks. Vista is also expecting Milei to pursue reforms of Argentine labor laws, which are highly restrictive for employers, in Congress this year.
The Vaca Muerta formation can help solve Argentina’s perennial problems with hard currency by driving energy trade surpluses. “If we continue doing what we’re doing, we’re aiming in 2030 to have a surplus of $20 billion, so it’s very important for the country,” Galuccio said on Bloomberg TV.
Other highlights from the investor event:
- Vista’s plan stands up with Brent prices as low as $60
- Galuccio sees demand growth in poorer countries helping keep prices at about $70 in coming years
- Current oil pipeline expansions will be enough to accommodate aggressive production growth for Vista
- Annual capex is seen at about $1.5 billion over the next three years
- Acquisitions of more oil fields aren’t required to meet targets
- “We don’t have the imperative for M&A,” Chief Financial Officer Pablo Vera Pinto said. “We don’t need more scale for the sake of it”
(Updates with comments on Bloomberg Television, starting in second paragraph.)
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